Journal of the House - 111th
Day - Saturday, May 20, 2006 - Top of Page 8021

STATE OF MINNESOTA

EIGHTY-FOURTH SESSION
-2006

_____________________

ONE HUNDRED ELEVENTH
DAY

Saint Paul, Minnesota, Saturday, May 20, 2006

The House of Representatives convened at 11:00 a.m. and was
called to order by Steve Sviggum, Speaker of the House.

Prayer was offered by the Reverend Lonnie E. Titus, House
Chaplain.

The members of the House gave the pledge of allegiance to the
flag of the United States of America.

The roll was called and the following members were present:

Abeler

Abrams

Anderson, B.

Atkins

Beard

Bernardy

Blaine

Bradley

Brod

Buesgens

Carlson

Charron

Clark

Cornish

Cox

Cybart

Davids

Davnie

Dean

DeLaForest

Demmer

Dempsey

Dill

Dittrich

Dorman

Dorn

Eastlund

Eken

Ellison

Emmer

Entenza

Erhardt

Erickson

Finstad

Fritz

Garofalo

Gazelka

Greiling

Gunther

Hackbarth

Hamilton

Hansen

Hausman

Haws

Heidgerken

Hilstrom

Hilty

Holberg

Hoppe

Hornstein

Hortman

Hosch

Howes

Huntley

Jaros

Johnson, J.

Johnson, R.

Johnson, S.

Juhnke

Kahn

Kelliher

Klinzing

Knoblach

Koenen

Kohls

Krinkie

Lanning

Larson

Latz

Lenczewski

Lesch

Liebling

Lieder

Lillie

Loeffler

Magnus

Mahoney

Mariani

Marquart

McNamara

Meslow

Moe

Mullery

Murphy

Nelson, P.

Newman

Nornes

Olson

Otremba

Ozment

Paulsen

Paymar

Pelowski

Penas

Peppin

Peterson, A.

Peterson, N.

Peterson, S.

Poppe

Powell

Rukavina

Ruth

Ruud

Sailer

Samuelson

Scalze

Seifert

Sertich

Severson

Sieben

Simon

Simpson

Slawik

Smith

Soderstrom

Solberg

Sykora

Thao

Thissen

Tingelstad

Urdahl

Vandeveer

Wagenius

Walker

Wardlow

Welti

Westerberg

Westrom

Wilkin

Zellers

Spk. Sviggum

A quorum was present.

Anderson, I., was excused.

Goodwin was excused until 12:30 p.m.Nelson, M., was excused until 3:05 p.m.

The Chief Clerk proceeded to read the Journal of the preceding
day.Meslow moved that further reading
of the Journal be suspended and that the Journal be approved as corrected by
the Chief Clerk.The motion prevailed.

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8022

PETITIONS AND COMMUNICATIONS

The following communications were received:

STATE
OF MINNESOTA

OFFICE
OF THE GOVERNOR

SAINT
PAUL 55155

May
16, 2006

The Honorable Steve Sviggum

Speaker of the House of
Representatives

The State of Minnesota

Dear Speaker Sviggum:

Please be advised that I have received, approved, signed, and
deposited in the Office of the Secretary of State the following House Files:

I have the honor to inform you that the following enrolled Acts
of the 2006 Session of the State Legislature have been received from the Office
of the Governor and are deposited in the Office of the Secretary of State for
preservation, pursuant to the State Constitution, Article IV, Section 23:

S. F.

No.

H. F.

No.

Session Laws

Chapter No.

Time and

Date Approved

2006

Date Filed

2006

12872024:45
p.m. May 16May
17

36702034:57
p.m. May 16May
17

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8023

28832074:53
p.m. May 16May 17

26972085:00
p.m. May 16May
17

10392114:50
p.m. May 16May
17

Sincerely,

Mary
Kiffmeyer

Secretary
of State

INTRODUCTION AND FIRST READING OF HOUSE BILLS

The following House File was introduced:

Sertich and Rukavina introduced:

H. F. No. 4220, A bill for an act relating to taconite
production taxation; modifying the uses of the taconite economic development
fund; amending Minnesota Statutes 2004, section 298.227.

The bill was read for the first time and referred to the
Committee on Jobs and Economic Opportunity Policy and Finance.

MESSAGES FROM THE SENATE

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce the passage by the Senate of the following
House Files, herewith returned:

H. F. No. 3288, A bill for an act relating to public safety;
making the chair of the Metropolitan Council or designee a member of the
Statewide Radio Board; amending Minnesota Statutes 2005 Supplement, section
403.36, subdivision 1.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate accedes to the request of the
House for the appointment of a Conference Committee on the amendments adopted
by the Senate to the following House File:

H. F. No. 3116, A bill for an act relating to game and fish;
restricting the use of four by four trucks on certain public lands; modifying
critical habitat private sector matching account provisions; providing
definitions; providing for and modifying disposition of certain revenue;
modifying provisions for designating game refuges; modifying

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8024

The Senate respectfully requests that a Conference Committee be
appointed thereon.The Senate has
appointed as such committee:

Senators Neuville, Betzold and Skoglund.

Said Senate File is herewith transmitted to the House with the
request that the House appoint a like committee.

Patrick E. Flahaven, Secretary of the Senate

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8025

Smith moved that the House
accede to the request of the Senate and that the Speaker appoint a Conference
Committee of 3 members of the House to meet with a like committee appointed by
the Senate on the disagreeing votes of the two houses on
S. F. No. 3199.The
motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following
House File, herewith returned, as amended by the Senate, in which amendments
the concurrence of the House is respectfully requested:

H. F. No. 3451, A bill for an act relating to governmental
operations; regulating certain historic properties; providing standards for
dedication of land to the public in a proposed development; authorizing a
dedication fee on certain new housing units; authorizing the conveyance of
certain surplus state lands; requiring a study and report; removing a route
from the trunk highway system; amending Minnesota Statutes 2004, section
462.358, subdivision 2b; proposing coding for new law in Minnesota Statutes,
chapter 15; repealing Minnesota Statutes 2004, section 161.115, subdivisions
173, 225.

Patrick E. Flahaven, Secretary of the Senate

Anderson, B., moved that the House refuse to concur in the
Senate amendments to H. F. No. 3451, that the Speaker appoint a
Conference Committee of 3 members of the House, and that the House requests
that a like committee be appointed by the Senate to confer on the disagreeing
votes of the two houses.The motion
prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following
House File, herewith returned, as amended by the Senate, in which amendments
the concurrence of the House is respectfully requested:

H. F.
No. 3995, A bill for an act relating to claims against the state; providing for
settlement of various claims; appropriating money.

Patrick E. Flahaven, Secretary of the Senate

CONCURRENCE
AND REPASSAGE

Anderson, B., moved that the House concur in the Senate
amendments to H. F. No. 3995 and that the bill be repassed as
amended by the Senate.The motion
prevailed.

H. F. No. 3995, A bill for an act relating to claims against
the state; providing for settlement of various claims; appropriating
money.

The bill was read for the third time, as amended by the Senate,
and placed upon its repassage.

The question was taken on the repassage of the bill and the
roll was called.There were 128 yeas
and 3 nays as follows:

Those who voted in the affirmative were:

Abeler

Abrams

Anderson, B.

Atkins

Beard

Bernardy

Blaine

Bradley

Brod

Carlson

Charron

Clark

Cornish

Cox

Cybart

Davids

Davnie

Dean

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8026

DeLaForest

Demmer

Dempsey

Dill

Dittrich

Dorman

Dorn

Eastlund

Eken

Ellison

Emmer

Entenza

Erhardt

Erickson

Finstad

Fritz

Garofalo

Gazelka

Greiling

Gunther

Hackbarth

Hamilton

Hansen

Hausman

Haws

Heidgerken

Hilstrom

Hilty

Holberg

Hoppe

Hornstein

Hortman

Hosch

Howes

Huntley

Jaros

Johnson, J.

Johnson, R.

Johnson, S.

Juhnke

Kahn

Kelliher

Klinzing

Knoblach

Koenen

Kohls

Lanning

Larson

Latz

Lenczewski

Lesch

Liebling

Lieder

Lillie

Loeffler

Magnus

Mahoney

Mariani

Marquart

McNamara

Meslow

Moe

Mullery

Murphy

Nelson, P.

Newman

Nornes

Otremba

Ozment

Paulsen

Paymar

Pelowski

Penas

Peppin

Peterson, A.

Peterson, N.

Peterson, S.

Poppe

Powell

Rukavina

Ruth

Ruud

Sailer

Samuelson

Scalze

Seifert

Sertich

Severson

Sieben

Simon

Simpson

Slawik

Smith

Soderstrom

Solberg

Sykora

Thao

Thissen

Tingelstad

Urdahl

Vandeveer

Wagenius

Walker

Wardlow

Welti

Westerberg

Westrom

Wilkin

Zellers

Spk. Sviggum

Those who voted in the negative were:

Buesgens

Krinkie

Olson

The bill was repassed, as amended by the Senate, and its title
agreed to.

The following Conference Committee Reports were received:

CONFERENCE
COMMITTEE REPORT ON H. F. NO. 3185

A bill for an act relating to high pressure piping; classifying
data relating to bioprocess piping and equipment as nonpublic; including
bioprocess piping in the definition of high pressure piping; amending Minnesota
Statutes 2004, sections 16B.61, subdivisions 2, 3; 326.461, subdivision 2;
proposing coding for new law in Minnesota Statutes, chapter 13.

May
18, 2006

The Honorable Steve Sviggum

Speaker of the House of
Representatives

The Honorable James P.
Metzen

President of the Senate

We,
the undersigned conferees for H. F. No. 3185 report that we have agreed upon
the items in dispute and recommend as follows:

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8027

Mahoney moved that the report of
the Conference Committee on H. F. No. 3185 be adopted and that
the bill be repassed as amended by the Conference Committee.The motion prevailed.

H. F. No. 3185, A bill for an act relating to high pressure
piping; classifying data relating to bioprocess piping and equipment as
nonpublic; including bioprocess piping in the definition of high pressure
piping; amending Minnesota Statutes 2004, sections 16B.61, subdivisions 2, 3;
326.461, subdivision 2; proposing coding for new law in Minnesota Statutes,
chapter 13.

The bill was read for the third time, as amended by Conference,
and placed upon its repassage.

The question was taken on the repassage of the bill and the
roll was called.There were 130 yeas
and 0 nays as follows:

Those who voted in the affirmative were:

Abeler

Abrams

Anderson, B.

Atkins

Beard

Bernardy

Blaine

Bradley

Brod

Buesgens

Carlson

Charron

Clark

Cornish

Cox

Cybart

Davids

Davnie

Dean

DeLaForest

Demmer

Dempsey

Dill

Dittrich

Dorman

Dorn

Eastlund

Eken

Ellison

Emmer

Entenza

Erhardt

Erickson

Finstad

Fritz

Garofalo

Gazelka

Greiling

Gunther

Hackbarth

Hamilton

Hansen

Hausman

Haws

Heidgerken

Hilstrom

Hilty

Holberg

Hoppe

Hornstein

Hortman

Hosch

Howes

Huntley

Jaros

Johnson, J.

Johnson, R.

Johnson, S.

Juhnke

Kahn

Kelliher

Klinzing

Knoblach

Koenen

Kohls

Krinkie

Lanning

Larson

Latz

Lenczewski

Lesch

Liebling

Lieder

Lillie

Loeffler

Magnus

Mahoney

Mariani

Marquart

McNamara

Meslow

Moe

Mullery

Murphy

Nelson, P.

Newman

Nornes

Olson

Otremba

Ozment

Paulsen

Paymar

Pelowski

Penas

Peppin

Peterson, A.

Peterson, N.

Peterson, S.

Poppe

Powell

Rukavina

Ruth

Ruud

Sailer

Samuelson

Scalze

Seifert

Sertich

Severson

Sieben

Simon

Simpson

Slawik

Smith

Soderstrom

Solberg

Sykora

Thao

Thissen

Tingelstad

Urdahl

Wagenius

Walker

Wardlow

Welti

Westerberg

Westrom

Wilkin

Zellers

Spk. Sviggum

The bill was repassed, as amended by Conference, and its title
agreed to.

CONFERENCE
COMMITTEE REPORT ON H. F. NO. 3779

A bill for an act relating
to adults-only businesses; requiring notice by certified mail to the
appropriate statutory or home-rule charter city under certain circumstances;
proposing coding for new law in Minnesota Statutes, chapter 617.

May
18, 2006

The Honorable Steve Sviggum

Speaker of the House of
Representatives

The Honorable James P.
Metzen

President of the Senate

We,
the undersigned conferees for H. F. No. 3779 report that we have agreed upon
the items in dispute and recommend as follows:

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8028

That the House
concur in the Senate amendments and that H. F. No. 3779 be further amended as
follows:

Page
2, line 18, after the period, insert "If the adult entertainment
establishment is proposed to be located outside the boundaries of a statutory
or home rule charter city the notice must be given to the clerk of the town
board and the county auditor of the county in which the establishment is
proposed to be located."

Page
2, line 19, delete "chief clerical"

Page
2, lines 20 and 21, after "body" insert "or town board"

Page
2, lines 25 and 27, after "city" insert "or town"

Page
2, line 26, after "city" insert "or the town board"

Page
3, line 3, after "establishment" insert "located in a
statutory or home rule city, town, or county that does not regulate hours of
operation"

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8029

Urdahl moved that the report of
the Conference Committee on H. F. No. 3779 be adopted and that
the bill be repassed as amended by the Conference Committee.The motion prevailed.

H. F. No. 3779, A bill for an act relating
to adults-only businesses; requiring notice by certified mail to the
appropriate statutory or home-rule charter city under certain circumstances;
proposing coding for new law in Minnesota Statutes, chapter 617.

The bill was read for the third time, as amended by Conference,
and placed upon its repassage.

The question was taken on the repassage of the bill and the roll
was called.There were 129 yeas and 1
nay as follows:

Those who voted in the affirmative were:

Abeler

Abrams

Anderson, B.

Atkins

Beard

Bernardy

Blaine

Bradley

Brod

Buesgens

Carlson

Charron

Clark

Cornish

Cox

Cybart

Davids

Davnie

Dean

DeLaForest

Demmer

Dempsey

Dill

Dittrich

Dorman

Dorn

Eastlund

Ellison

Emmer

Entenza

Erhardt

Erickson

Finstad

Fritz

Garofalo

Gazelka

Greiling

Gunther

Hackbarth

Hamilton

Hansen

Hausman

Haws

Heidgerken

Hilstrom

Hilty

Holberg

Hoppe

Hornstein

Hortman

Hosch

Howes

Huntley

Johnson, J.

Johnson, R.

Johnson, S.

Juhnke

Kahn

Kelliher

Klinzing

Knoblach

Koenen

Kohls

Krinkie

Lanning

Larson

Latz

Lenczewski

Lesch

Liebling

Lieder

Lillie

Loeffler

Magnus

Mahoney

Mariani

Marquart

McNamara

Meslow

Moe

Mullery

Murphy

Nelson, P.

Newman

Nornes

Olson

Otremba

Ozment

Paulsen

Paymar

Pelowski

Penas

Peppin

Peterson, A.

Peterson, N.

Peterson, S.

Poppe

Powell

Rukavina

Ruth

Ruud

Sailer

Samuelson

Scalze

Seifert

Sertich

Severson

Sieben

Simon

Simpson

Slawik

Smith

Soderstrom

Solberg

Sykora

Thao

Thissen

Tingelstad

Urdahl

Vandeveer

Wagenius

Walker

Wardlow

Welti

Westerberg

Westrom

Wilkin

Zellers

Spk. Sviggum

Those who voted in the negative were:

Jaros

The bill was repassed, as amended by Conference, and its title
agreed to.

ANNOUNCEMENTS
BY THE SPEAKER

The Speaker announced the appointment of the following members
of the House to a Conference Committee on S. F. No. 3199:

Smith, Meslow and Mahoney.

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8030

The Speaker announced the
appointment of the following members of the House to a Conference Committee on
H. F. No. 3451:

Anderson, B.; Hornstein and Charron.

CALENDAR FOR THE DAY

S. F. No. 2743 was reported to the House.

Westrom moved to amend S. F. No. 2743 as
follows:

Delete everything after the enacting clause and insert the
following language of H. F. No. 3110, the first engrossment:

Subd.
1b.Audio ballot reader."Audio ballot reader" means an audio representation of a
ballot that can be used with other assistive voting technology to permit a
voter to mark votes on a nonelectronic ballot or to securely transmit a
ballot electronically to automatic tabulating equipment in the polling place.

Subd.
3.Ballot."Ballot" includes paper ballots,
ballot cards, and the paper ballot marked by an electronic marking
device, and an electronic record of each vote cast by a voter at an election
and securely transmitted electronically to automatic tabulating equipment in
the polling place.

Subd.
7a.Electronic ballot display."Electronic ballot display" means a graphic representation of
a ballot on a computer monitor or screen on which a voter may make vote choices
for candidates and questions for the purpose of marking a nonelectronic ballot
or securely transmitting an electronic ballot to automatic tabulating equipment
in the polling place.

Subd.
8.Electronic
voting system."Electronic
voting system" means a system in which the voter records votes by means of
marking or transmitting a ballot, so that votes may be counted by
automatic tabulating equipment in the polling place where the ballot is cast or
at a counting center.

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8031

An electronic
voting system includes automatic tabulating equipment; nonelectronic ballot
markers; electronic ballot markers, including electronic ballot display, audio
ballot reader, and devices by which the voter will register the voter's voting
intent; software used to program automatic tabulators and layout ballots;
computer programs used to accumulate precinct results; ballots; secrecy
folders; system documentation; and system testing results.

Subd.
5.Alternation.The provisions of the election laws
requiring the alternation of names of candidates must be observed as far as
practicable by changing the order of the names on an electronic voting system
in the various precincts so that each name appears on the machines or marking
devices used in a municipality substantially an equal number of times in the
first, last, and in each intermediate place in the list or group in which they
belong.However, the arrangement of
candidates' names must be the same on all voting systems used in the same
precinct.If the number of names to be
alternated exceeds the number of precincts, the election official responsible
for providing the ballots, in accordance with subdivision 1, shall determine by
lot the alternation of names.

If an
electronic ballot marker is used with a paper ballot that is not an optical
scan ballot card, the manner of alternation of candidate names on the paper
ballot must be as prescribed for optical scan ballots in this subdivision.If a machine is used to securely transmit
a ballot electronically to automatic tabulating equipment in the polling place,
the manner of alternation of candidate names on the transmitting machine must
be as prescribed for optical scan ballots in this subdivision.

(2)
permits every voter to vote for all candidates and questions for whom or upon
which the voter is legally entitled to vote;

(3)
provides for write-in voting when authorized;

(4)
automatically rejects, except as provided in section 206.84 with respect to
write-in votes, all votes for an office or question when the number of votes
cast on it exceeds the number which the voter is entitled to cast;

(5)
permits a voter at a primary election to select secretly the party for which
the voter wishes to vote;

(6)
automatically rejects all votes cast in a primary election by a voter when the
voter votes for candidates of more than one party; and

(7)
provides every voter an opportunity to verify votes recorded on the permanent
paper ballot or paper record, either visually or using assistive voting
technology, and to change votes or correct any error before the voter's ballot
is cast and counted, produces an individual, discrete, permanent, paper ballot or
paper record of the ballot cast by the voter, and preserves the paper
ballot or paper record as an official record available for use in any
recount.

(b) An
electronic voting system purchased on or after June 4, 2005, may not be employed
unless it:

(1)
accepts and tabulates, in the polling place or at a counting center, a marked
optical scan ballot; or

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8032

(2) creates a
marked optical scan ballot that can be tabulated in the polling place or at a
counting center by automatic tabulating equipment certified for use in this
state; or

(3)
securely transmits a ballot electronically to automatic tabulating equipment in
the polling place while creating an individual, discrete, permanent paper
record of each vote on the ballot.

Subdivision
1.Contracts
required.(a) The secretary of
state, with the assistance of the commissioner of administration, shall
establish one or more state voting systems contracts.The contracts should, if practical, include provisions for
maintenance of the equipment purchased.The voting systems contracts must address precinct-based optical scan
voting equipment, and ballot marking equipment for persons with
disabilities and other voters, and assistive voting machines that combine
voting methods used for persons with disabilities with precinct-based optical
scan voting machines.The contracts
must give the state a perpetual license to use and modify the software.The contracts must include provisions to
escrow the software source code, as provided in subdivision 2.Bids for voting systems and related election
services must be solicited from each vendor selling or leasing voting systems
that have been certified for use by the secretary of state.The contracts must be renewed from time to
time.

(b)
The secretary of state shall appoint an advisory committee, including
representatives of the state chief information officer, county auditors,
municipal clerks who have had operational experience with the use of electronic
voting systems, and members of the disabilities community to advise the
secretary of state in reviewing and evaluating the merits of proposals
submitted from voting equipment vendors for the state contracts.

(c)
Counties and municipalities may purchase or lease voting systems and obtain
related election services from the state contracts.

Within
14 days before election day, the official in charge of elections shall have the
voting system tested to ascertain that the system will correctly mark or
securely transmit to automatic tabulating equipment in the polling place ballots
using all methods supported by the system, including through assistive
technology, and count the votes cast for all candidates and on all
questions.Public notice of the time
and place of the test must be given at least two days in advance by publication
once in official newspapers.The test
must be observed by at least two election judges, who are not of the same major
political party, and must be open to representatives of the political parties,
candidates, the press, and the public.The test must be conducted by (1) processing a preaudited group of
ballots punched or marked to record a predetermined number of valid votes for
each candidate and on each question, and must include for each office one or
more ballot cards which have votes in excess of the number allowed by law in
order to test the ability of the voting system tabulator and electronic ballot
marker to reject those votes; and (2) processing an additional test deck of ballots
marked using the electronic ballot marker for the precinct, including ballots
marked or ballots securely transmitted electronically to automatic
tabulating equipment in the polling place using the electronic ballot
display, audio ballot reader, and any assistive voting technology used with the
electronic ballot marker.If any error
is detected, the cause must be ascertained and corrected and an errorless count
must be made before the voting system may be used in the election.After the completion of the test, the
programs used and ballot cards must be sealed, retained, and disposed of as
provided for paper ballots.

Subd.
8.Duties
of election officials.The official
in charge of elections in each municipality where an optical scan voting system
is used shall have the electronic ballot marker that examines and marks votes
on ballot cards or the machine that securely transmits a ballot
electronically to automatic tabulating equipment in the polling place and
the automatic tabulating equipment that examines and counts votes as ballot
cards are deposited into ballot boxes put in order, set, adjusted, and made
ready for voting when delivered to the election precincts.

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8033

Sec. 11.[206.91]
VOTING MACHINES OPTIONS WORKING GROUP.

(a)
A working group is hereby established to investigate and recommend to the
legislature requirements for additional options for voting equipment that
complies with the requirements of section 301 of the Help America Vote Act,
Public Law 107-252, to provide private and independent voting for individuals
with disabilities.

The
working group must be cochaired by representatives of the Minnesota Disability
Law Center and Citizens for Election Integrity - Minnesota.

(b)
The working group must convene its first meeting by June 2006 and must report
to the legislature by February 15, 2007.

(c)
The working group must include, but is not limited to:

(1)
the disability community;

(2)
the secretary of state;

(3)
county and local election officials;

(4)
major and minor political parties;

(5)(i)
one member of the senate majority caucus and one member of the senate minority
caucus appointed by the Subcommittee on Committees of the Committee on Rules
and Administration; and

(ii)
one member of the house majority caucus and one member of the house minority
caucus appointed by the speaker;

(6)
nonpartisan organizations;

(7)
at least one individual with computer security expertise and knowledge of
elections; and

(8)
members of the public, other than vendors of election equipment, selected by
consensus of the other members, including representatives of language and other
minorities.

(d)
Members of the working group will be selected by:

(1)
a representative of the Office of the Secretary of State;

(2)
a representative of the county election officials;

(3)
the cochairs; and

(4)
two legislators representing each party.

Sec.
12.EFFECTIVE DATE.

Sections
1 to 11 are effective the day following final enactment."

Journal
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The
legislature finds that individuals attempting to escape from actual or
threatened domestic violence, sexual assault, or stalking frequently establish
new addresses in order to prevent their assailants or probable assailants from
finding them.The purpose of this
chapter is to enable state and local agencies to respond to requests for data
without disclosing the location of a victim of domestic violence, sexual
assault, or stalking; to enable interagency cooperation with the secretary of
state in providing address confidentiality for victims of domestic violence, sexual
assault, or stalking; and to enable program participants to use an address
designated by the secretary of state as a substitute mailing address for all
purposes.

EFFECTIVE DATE.This section is effective September 1, 2007.

Sec.
2.[5B.02]
DEFINITIONS.

(a)
For purposes of this chapter and unless the context clearly requires otherwise,
the definitions in this section have the meanings given them.

(b)
"Address" means a residential street address, school address, or work
address of an individual, as specified on the individual's application to be a
program participant under this chapter.

(c)
"Applicant" means an adult, a parent or guardian acting on behalf of
an eligible minor, or a guardian acting on behalf of an incapacitated person,
as defined in section 524.5-102.

(d)
"Domestic violence" means an act as defined in section 518B.01,
subdivision 2, paragraph (a), and includes a threat of such acts committed
against an individual in a domestic situation, regardless of whether these acts
or threats have been reported to law enforcement officers.

(e)
"Eligible person" means an adult, a minor, or an incapacitated
person, as defined in section 524.5-102 for whom there is good reason to
believe (i) that the eligible person is a victim of domestic violence, sexual
assault, or stalking, or (ii) that the eligible person fears for his or her
safety or the safety of persons on whose behalf the application is made.

(f)
"Program participant" means an individual certified as a program
participant under section 5B.03.

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Day - Saturday, May 20, 2006 - Top of Page 8035

(g)
"Stalking" means acts criminalized under section 609.749 and includes
a threat of such acts committed against an individual, regardless of whether
these acts or threats have been reported to law enforcement officers.

EFFECTIVE DATE.This section is effective September 1, 2007.

Sec. 3.[5B.03]
ADDRESS CONFIDENTIALITY PROGRAM.

Subdivision 1.Application.The secretary of state shall certify an eligible
person as a program participant when the secretary receives an application that
must contain:

(1) the name of the eligible
person;

(2) a statement by the
applicant that the applicant has good reason to believe (i) that the eligible
person listed on the application is a victim of domestic violence, sexual
assault, or stalking, (ii) that the eligible person fears for the person's
safety or the safety of persons on whose behalf the application is made, and
(iii) that the eligible person is not applying for certification as a program
participant in order to avoid prosecution for a crime;

(3) a designation of the
secretary of state as agent for purposes of service of process and for the
purpose of receipt of mail;

(4) the mailing address
where the eligible person can be contacted by the secretary of state, and the
phone number or numbers where the applicant or eligible person can be called by
the secretary of state;

(5) the physical address or
addresses of the eligible person, disclosure of which will increase the risk of
domestic violence, sexual assault, or stalking;

(6) a statement whether the
eligible person would like information on becoming an ongoing absentee ballot
recipient pursuant to section 5B.06; and

(7) the signature of the applicant,
an indicator of the applicant's authority to act on behalf of the eligible
person, if appropriate, the name and signature of any individual or
representative of any person who assisted in the preparation of the
application, and the date on which the application was signed.

Subd. 2.Filing.Applications must be filed with the
secretary of state and are subject to the provisions of section 5.15.

Subd. 3.Certification.Upon filing a completed application, the
secretary of state shall certify the eligible person as a program
participant.Program participants shall
be certified for four years following the date of filing unless the
certification is cancelled, withdrawn or invalidated before that date.The secretary of state shall by rule establish
a renewal procedure.

Subd. 4.Changes in information.Program participants or applicants must
inform the secretary of state of any changes in the information submitted on
the application.

Subd. 5.Designated address.The secretary of state must designate a
mailing address to which all mail for program participants is to be sent.

Subd. 6.Attaining age of
majority.An individual who
became a program participant as a minor assumes responsibility for changes in
information and renewal when the individual reaches age 18.

EFFECTIVE DATE.This section is effective September 1, 2007.

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of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8036

Sec. 4.[5B.04]
CERTIFICATION CANCELLATION.

(a)
If the program participant obtains a legal change of identity, the participant
loses certification as a program participant.

(b)
The secretary of state may cancel a program participant's certification if
there is a change in the mailing address, unless the program participant or the
person who signed as the applicant on behalf of an eligible person provides the
secretary of state with at least two days' prior notice in writing of the
change of address.

(c)
The secretary of state may cancel certification of a program participant if
mail forwarded by the secretary to the program participant's address is
returned as nondeliverable.

(d)
The secretary of state shall cancel certification of a program participant who
applies using false information.

EFFECTIVE DATE.This section is effective September 1, 2007.

Sec.
5.[5B.05]
USE OF DESIGNATED ADDRESS.

(a)
When a program participant presents the address designated by the secretary of
state to any person, that address must be accepted as the address of the
program participant.

(b)
A program participant may use the address designated by the secretary of state
as the program participant's work address.

(c)
The Office of the Secretary of State shall forward all mail sent to the
designated address to the proper program participants.

EFFECTIVE DATE.This section is effective September 1, 2007.

Sec.
6.[5B.06]
VOTING BY PROGRAM PARTICIPANT; USE OF DESIGNATED ADDRESS BY COUNTY AUDITOR.

A
program participant who is otherwise eligible to vote may register with the
secretary of state as an ongoing absentee voter.The secretary of state shall determine the precinct in which the
residential address of the program participant is located and shall request
from and receive from the county auditor or other election official the ballot
for that precinct and shall forward the absentee ballot to the program
participant with the other materials for absentee balloting as required by
Minnesota law.The program participant
shall complete the ballot and return it to the secretary of state, who shall
review the ballot in the manner provided by section 203B.24.If the ballot and ballot materials comply
with the requirements of that section, the ballot must be certified by the
secretary of state as the ballot of a program participant, and must be
forwarded to the appropriate electoral jurisdiction for tabulation along with
all other ballots.The name and address
of a program participant must not be listed in the statewide voter registration
system.

EFFECTIVE DATE.This section is effective September 1, 2007.

Sec.
7.[5B.07]
DATA CLASSIFICATION.

All
data related to applicants, eligible persons and program participants is
private data as defined by section 13.02, subdivision 12.A consent for release of information from an
applicant,, eligible person, or program participant is not effective.

EFFECTIVE DATE.This section is effective September 1, 2007.

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Sec. 8.[5B.08]
ADOPTION OF RULES.

Enactment
of this section satisfies the requirements of section 14.388, subdivision 1 for
the enactment of rules to facilitate the administration of this chapter by
state and local agencies.

Subd.
3.Prohibitions.(a) A Web site or publication must not
include pictures or other materials that tend to attribute the Web site or
publication to an individual or group of individuals instead of to a public
office, state agency, or political subdivision.A publication must not include the words "with the
compliments of" or contain letters of personal greeting that promote an
elected or appointed official of a state agency or political subdivision.

(b) A
Web site, other than a Web site maintained by a public library or the
election-related Web site maintained by the office of the secretary of state or
the Campaign Finance and Public Disclosure Board, may not contain a link to
a Weblog or site maintained by a candidate, a political committee, a political
party or party unit, a principal campaign committee, or a state committee.Terms used in this paragraph have the
meanings given them in chapter 10A, except that "candidate" also
includes a candidate for an elected office of a political subdivision.

EFFECTIVE DATE.This section is effective the day following final enactment.

Subd.
4.Permitted
material.(a) Material specified in
this subdivision may be included on a Web site or in a publication, but only if
the material complies with subdivision 2.This subdivision is not a comprehensive list of material that may be
contained on a Web site or in a publication, if the material complies with
subdivision 2.

(b) A
Web site or publication may include biographical information about an elected
or appointed official, a single official photograph of the official, and
photographs of the official performing functions related to the office.There is no limitation on photographs,
Webcasts, archives of Webcasts, and audio or video files that facilitate access
to information or services or inform the public about the duties and
obligations of the office or that are intended to promote trade or
tourism.A state Web site or
publication may include photographs or information involving civic or
charitable work done by the governor's spouse, provided that these activities
relate to the functions of the governor's office.

(c) A
Web site or publication may include press releases, proposals, policy
positions, and other information directly related to the legal functions,
duties, and jurisdiction of a public official or organization.

(d)
The election-related Web site maintained by the office of the secretary of
state shall provide links to:

(1)
the campaign Web site of any candidate for legislative, constitutional,
judicial, or federal office who requests or whose campaign committee requests
such a link and provides in writing a valid URL address to the office of the
secretary of state; and

(2)
the Web site of any individual or group advocating for or against or providing
neutral information with respect to any ballot question, where the individual
or group requests such a link and provides in writing a valid Web site address
and valid e-mail address to the office of the secretary of state.

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These links must
be provided on the election-related Web site maintained by the office of the
secretary of state from the opening of filing for the office in question until
the business day following the day on which the State Canvassing Board has declared
the results of the state general election, or November 30 of the year in which
the election has taken place, whichever date is earlier.The link must be activated on the
election-related Web site maintained by the office of the secretary of state within
two business days of receipt of the request from a qualified candidate or
committee.

EFFECTIVE DATE.This section is effective the day following final enactment.

Subd. 26.Noncampaign
disbursement."Noncampaign
disbursement" means a purchase or payment of money or anything of value
made, or an advance of credit incurred, or a donation in kind received, by a
principal campaign committee for any of the following purposes:

(1) payment for accounting
and legal services;

(2) return of a contribution
to the source;

(3) repayment of a loan made
to the principal campaign committee by that committee;

(4) return of a public
subsidy;

(5) payment for food,
beverages, entertainment, and facility rental for a fund-raising event;

(6) services for a
constituent by a member of the legislature or a constitutional officer in the
executive branch, including the costs of preparing and distributing a suggestion
or idea solicitation to constituents, performed from the beginning of the term
of office to adjournment sine die of the legislature in the election year for
the office held, and half the cost of services for a constituent by a member of
the legislature or a constitutional officer in the executive branch performed
from adjournment sine die to 60 days after adjournment sine die;

(7) payment for food and
beverages consumed by a candidate or volunteers while they are engaged in
campaign activities;

(8) payment for food or a
beverage consumed while attending a reception or meeting directly related to
legislative duties;

(9) payment of expenses
incurred by elected or appointed leaders of a legislative caucus in carrying
out their leadership responsibilities;

(10) payment by a principal
campaign committee of the candidate's expenses for serving in public office,
other than for personal uses;

(11) costs of child care for
the candidate's children when campaigning;

(12) fees paid to attend a
campaign school;

(13) costs of a postelection
party during the election year when a candidate's name will no longer appear on
a ballot or the general election is concluded, whichever occurs first;

(14) interest on loans paid
by a principal campaign committee on outstanding loans;

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(17)
the cost of campaign material purchased to replace defective campaign material,
if the defective material is destroyed without being used;

(18)
contributions to a party unit;

(19)
payments for funeral gifts or memorials; and

(20) the
cost of a magnet less than six inches in diameter containing legislator contact
information and distributed to constituents; and

(21)
other
purchases or payments specified in board rules or advisory opinions as being
for any purpose other than to influence the nomination or election of a
candidate or to promote or defeat a ballot question.

The
board must determine whether an activity involves a noncampaign disbursement
within the meaning of this subdivision.

A
noncampaign disbursement is considered to be made in the year in which the
candidate made the purchase of goods or services or incurred an obligation to
pay for goods or services.

EFFECTIVE DATE.This section is effective the day following final enactment.

Sec.
12.[13.805] ADDRESS CONFIDENTIALITY DATA CODED ELSEWHERE.

Subdivision
1.Scope.The section referred to in subdivision 2
is codified outside this chapter.This
section classifies address confidentiality program data as other than public.

Subd.
2.Address
confidentiality program.Data
maintained by the Office of the Secretary of State regarding the address
confidentiality program are governed by section 5B.07.

Subdivision
1.Prior
to election day.At any time except
during the 20 days immediately preceding any regularly scheduled election,
an eligible voter or any individual who will be an eligible voter at the time
of the next election may register to vote in the precinct in which the voter
maintains residence by completing a voter registration application as described
in section 201.071, subdivision 1, and submitting it in person or by mail to
the county auditor of that county or to the Secretary of State's Office.A registration that is received no later
than 5:00 p.m. on the 21st day preceding any election shall be accepted.An improperly addressed or delivered
registration application shall be forwarded within two working days after receipt
to the county auditor of the county where the voter maintains residence.A state or local agency or an individual
that accepts completed voter registration applications from a voter must submit
the completed applications to the secretary of state or the appropriate county
auditor within ten days after the applications are dated by the voter.

For
purposes of this section, mail registration is defined as a voter registration
application delivered to the secretary of state, county auditor, or municipal
clerk by the United States Postal Service or a commercial carrier.

EFFECTIVE DATE.This section is effective July 1, 2006.

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Subd.
3.Election
day registration.(a) An individual
who is eligible to vote may register on election day by appearing in person at
the polling place for the precinct in which the individual maintains residence,
by completing a registration application, making an oath in the form prescribed
by the secretary of state and providing proof of residence.An individual may prove residence for
purposes of registering by:

(2)
presenting any document approved by the secretary of state as proper
identification;

(3)
presenting one of the following:

(i) a
current valid student identification card from a postsecondary educational
institution in Minnesota, if a list of students from that institution has been
prepared under section 135A.17 and certified to the county auditor in the
manner provided in rules of the secretary of state; or

(ii) a
current student fee statement that contains the student's valid address in the
precinct together with a picture identification card; or

(4)
having a voter who is registered to vote in the precinct, or who is an employee
employed by and working in a residential facility in the precinct and vouching
for a resident in the facility, sign an oath in the presence of the election
judge vouching that the voter or employee personally knows that the individual
is a resident of the precinct.A voter
who has been vouched for on election day may not sign a proof of residence oath
vouching for any other individual on that election day.A voter who is registered to vote in the
precinct may sign up to 15 proof-of-residence oaths on any election day.This limitation does not apply to an
employee of a residential facility described in this clause.The secretary of state shall provide a form
for election judges to use in recording the number of individuals for whom a
voter signs proof-of-residence oaths on election day.The form must include space for the maximum number of individuals
for whom a voter may sign proof-of-residence oaths.For each proof-of-residence oath, the form must include a
statement that the voter is registered to vote in the precinct, personally
knows that the individual is a resident of the precinct, and is making the
statement on oath.The form must
include a space for the voter's printed name, signature, telephone number, and
address.

The
oath required by this subdivision and Minnesota Rules, part 8200.9939, must be
attached to the voter registration application and the information on the oath
must be recorded on the records of both the voter registering on election day
and the voter who is vouching for the person's residence, and entered into the
statewide voter registration system by the county auditor when the voter
registration application is entered into that system.

(b)
The operator of a residential facility shall prepare a list of the names of its
employees currently working in the residential facility and the address of the
residential facility.The operator
shall certify the list and provide it to the appropriate county auditor no less
than 20 days before each election for use in election day registration.

(c)
"Residential facility" means transitional housing as defined in
section 256E.33, subdivision 1; a supervised living facility licensed by the
commissioner of health under section 144.50, subdivision 6; a nursing home as
defined in section 144A.01, subdivision 5; a residence registered with the
commissioner of health as a housing with services establishment as defined in
section 144D.01, subdivision 4; a veterans home operated by the board of
directors of the Minnesota Veterans Homes under chapter 198; a residence
licensed by the commissioner of human services to provide a residential program
as defined in section 245A.02, subdivision 14; a residential facility for
persons with a developmental disability licensed by the commissioner of human
services under section 252.28; group residential housing as defined in section
256I.03, subdivision 3; a shelter for battered women as defined in section
611A.37, subdivision 4; or a supervised publicly or privately operated shelter
or dwelling designed to provide temporary living accommodations for the
homeless.

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(d) For tribal band
members, an individual may prove residence for purposes of registering by:

(1) presenting an
identification card issued by the tribal government of a tribe recognized by
the Bureau of Indian Affairs, United States Department of the Interior, that
contains the name, address, signature, and picture of the individual; or

(2)
presenting an identification card issued by the tribal government of a tribe
recognized by the Bureau of Indian Affairs, United States Department of the
Interior, that contains the name, signature, and picture of the individual and
also presenting one of the documents listed in Minnesota Rules, part 8200.5100,
subpart 2, item B.

(e) A
county, school district, or municipality may require that an election judge
responsible for election day registration initial each completed registration
application.

A
communicatively impaired individual who needs interpreter services at a
precinct caucus shall so notify the major political party whose caucus the
individual plans to attend.Written
Notice must be given by certifiedletter or electronic mail to
the county or legislative district committeestate office of the major
political party at least 30 days before the precinct caucus
date.The major political party, not
later than 14 days before the precinct caucus date, shall promptly
attempt to secure the services of one or more interpreters if available and
shall assume responsibility for the cost of the services if provided.The state central committee of the major
political party shall determine the process for reimbursing interpreters.

A
visually impaired individual may notify the county or legislative district
committee of the major political party whose precinct caucus the individual
plans to attend, that the individual requires caucus materials in audio tape,
Braille, or large type format.Upon
receiving the request, the county or legislative district committee shall
provide all official written caucus materials as soon as they are available, so
that the visually impaired individual may have them converted to audio tape,
Braille, or large print format prior to the precinct caucus.

Subdivision
1.Unable
to go to polling place.(a) Any
eligible voter who reasonably expects to be unable to go to the polling place
on election day in the precinct where the individual maintains residence
because of absence from the precinct,; illness, including
isolation or quarantine under sections 144.419 to 144.4196 or United States
Code, title 42, sections 264 to 272; disability,; religious
discipline,; observance of a religious holiday,; or
service as an election judge in another precinct may vote by absentee ballot as
provided in sections 203B.04 to 203B.15.

(b)
If the governor has declared an emergency and filed the declaration with the
secretary of state under section 12.31, and the declaration states that the
emergency has made it difficult for voters to go to the polling place on
election day, any voter in a precinct covered by the declaration may vote by
absentee ballot as provided in sections 203B.04 to 203B.15.

EFFECTIVE DATE.This section is effective the day following final enactment.

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Subd.
3.Delivery
of ballots.(a) If an
application for absentee ballots is accepted at a time when absentee ballots
are not yet available for distribution, the county auditor, or municipal clerk
accepting the application shall file it and as soon as absentee ballots are
available for distribution shall mail them to the address specified in the
application.If an application for
absentee ballots is accepted when absentee ballots are available for
distribution, the county auditor or municipal clerk accepting the application
shall promptly:

(a)
(1) Mail the ballots to the
voter whose signature appears on the application if the application is
submitted by mail and does not request commercial shipping under clause (2);

(2)
ship the ballots to the voter using a commercial shipper requested by the voter
at the voter's expense;

(b) (3) Deliver the absentee
ballots directly to the voter if the application is submitted in person; or

(c) (4) Deliver the absentee
ballots in a sealed transmittal envelope to an agent who has been designated to
bring the ballots to a voter who is a patient in a health care facility, as
provided in section 203B.11, subdivision 4, a participant in a residential
program for adults licensed under section 245A.02, subdivision 14, or a
resident of a shelter for battered women as defined in section 611A.37,
subdivision 4.

(b)
If an
application does not indicate the election for which absentee ballots are
sought, the county auditor or municipal clerk shall mail or deliver only the
ballots for the next election occurring after receipt of the application.Only one set of ballots may be mailed,
shipped, or delivered to an applicant for any election, except as provided
in section 203B.13, subdivision 2, or when a replacement ballot has been
requested by the voter for a ballot that has been spoiled or lost in transit.

Subd.
4.Agent
delivery of ballots.During the
four days preceding an election and until 2:00 p.m. on election day, an
eligible voter who is a patient of a health care facility, a participant in
a residential program for adults licensed under section 245A.02, subdivision
14, or a resident of a shelter for battered women as defined in section
611A.37, subdivision 4, may designate an agent to deliver the ballots to
the voter from the county auditor or municipal clerk.A candidate at the election may not be designated as an
agent.The voted ballots must be
returned to the county auditor or municipal clerk no later than 3:00 p.m. on
election day.The voter must complete
an affidavit requesting the auditor or clerk to provide the agent with the
ballots in a sealed transmittal envelope.The affidavit must include a statement from the voter stating that the
ballots were delivered to the voter by the agent in the sealed transmittal
envelope.An agent may deliver ballots
to no more than three persons in any election.The secretary of state shall provide samples of the affidavit and
transmission envelope for use by the county auditors.

The
county auditors, municipal clerks, and school district clerks shall retain all
election materials returned to them after any election for at least 22 months
from the date of that election.All
election materials involved in a contested election must be retained for 22
months or until the contest has been finally determined, whichever is
later.Abstracts filed by canvassing
boards shall be retained permanently by any officer with whom those abstracts
are filed.Election materials no longer
required to be retained pursuant to this section shall be disposed of in
accordance with sections 138.163 to 138.21.Sealed envelopes containing voted ballots must be retained unopened,
except as provided in this section, in a secure location.The county auditor, municipal clerk, or
school district clerk shall not permit any voted ballots to be tampered with or
defaced.

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After the time for
filing a notice of contest for an election has passed, the secretary of state
may, for the purpose of monitoring and evaluating election procedures: (1)
open the sealed ballot envelopes and inspect the ballots for that election
maintained by the county auditors, municipal clerks, or school district clerks for
the purpose of monitoring and evaluating election procedures.; (2)
inspect the polling place rosters and completed voter registration
applications; or (3) examine other forms required in the Minnesota election
laws for use in the polling place.No
inspected ballot or document may be marked or identified in any
manner.After inspection, all ballots
must be returned to the ballot envelope and the ballot envelope must be
securely resealed.Any other
election materials inspected or examined must be secured or resealed.No polling place roster may be inspected
until the voting history for that precinct has been posted.No voter registration application may be
inspected until the information on it has been entered into the statewide
registration system.

Sec.
20.[204C.035] DECEPTIVE PRACTICES IN ELECTIONS.

Subdivision
1.Criminal
penalty.No person shall
knowingly deceive another person regarding the time, place, or manner of
conducting an election or the qualifications for or restrictions on voter
eligibility for an election, with the intent to prevent the individual from
voting in the election.A violation of
this section is a gross misdemeanor.

Subd.
2.Reporting
false election information.Any
person may report to the county auditor or municipal clerk an act of deception
regarding the time, place, or manner of conducting an election or the
qualifications for or restrictions on voter eligibility for an election.The election official to whom the report was
made shall provide accurate information to the person who reported the
incorrect information in a timely manner, and may provide information about the
act of deception and accurate information to mass media outlets in any affected
area.The county attorney may
subsequently proceed under subdivision 1.

EFFECTIVE DATE.This section is effective August 1, 2006, and applies to
offenses committed on or after that date.

Subd.
5.Prohibited
challenges.Challengers and
the political parties that appointed them must not compile lists of voters to
challenge on the basis of mail sent by a political party that was returned as
undeliverable or if receipt by the intended recipient was not acknowledged in
the case of registered mail.This
subdivision applies to any local, state, or national affiliate of a political
party that has appointed challengers, as well as any subcontractors, vendors,
or other individuals acting as agents on behalf of a political party.

A
violation of this subdivision is a gross misdemeanor.

EFFECTIVE DATE.This section is effective the day following final enactment
and applies to offenses committed on or after that date.

(a) An
individual seeking to vote shall sign a polling place roster which states that
the individual is at least 18 years of age, a citizen of the United States, has
resided in Minnesota for 20 days immediately preceding the election, maintains
residence at the address shown, is not under a guardianship in which the court
order revokes the individual's right to vote, has not been found by a court of
law to be legally incompetent to vote or convicted of a felony without
having civil rights restored has the right to vote because, if the
individual was convicted of a felony, the felony sentence has expired or been
completed or the individual has been discharged from the sentence, is
registered and has not already voted in the election.The roster must also state: "I understand that deliberately
providing false information is a felony punishable by not more than five years
imprisonment and a fine of not more than $10,000, or both."

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(b) A judge may,
before the applicant signs the roster, confirm the applicant's name, address,
and date of birth.

(c)
After the applicant signs the roster, the judge shall give the applicant a
voter's receipt.The voter shall
deliver the voter's receipt to the judge in charge of ballots as proof of the
voter's right to vote, and thereupon the judge shall hand to the voter the
ballot.The voters' receipts must be
maintained during the time for notice of filing an election contest.

Subdivision
1.Interpreters;
Physical assistance in marking ballots.A voter who claims a need for assistance because of inability to read
English or physical inability to mark a ballot may obtain the aid of two election
judges who are members of different major political parties.The election judges shall mark the ballots
as directed by the voter and in as secret a manner as circumstances permit.If the voter is deaf or cannot speak English
or understand it when it is spoken, the election judges may select two
individuals who are members of different major political parties to act as
interpreters provide assistance.The interpreters individuals shall assist the individual
voter in marking the ballots.A
voter in need of assistance may alternatively obtain the assistance of any
individual the voter chooses.Only the
following persons may not provide assistance to a voter:the voter's employer, an agent of the
voter's employer, an officer or agent of the voter's union, or a candidate for
election.The person who assists the
voter shall, unaccompanied by an election judge, retire with that voter to a
booth and mark the ballot as directed by the voter.No person who assists another voter as provided in the preceding sentence
shall mark the ballots of more than three voters at one election.Before the ballots are deposited, the voter
may show them privately to an election judge to ascertain that they are marked
as the voter directed.An election
judge or other individual assisting a voter shall not in any manner request,
persuade, induce, or attempt to persuade or induce the voter to vote for any
particular political party or candidate.The election judges or other individuals who assist the voter shall not
reveal to anyone the name of any candidate for whom the voter has voted or
anything that took place while assisting the voter.

Subd.
1b.Audio ballot reader."Audio ballot reader" means an audio representation of a
ballot that can be used with other assistive voting technology to permit a
voter to mark votes on a nonelectronic ballot or to securely transmit a
ballot electronically to automatic tabulating equipment in the polling place.

EFFECTIVE DATE.This section is effective the day following final enactment.

Subd.
3.Ballot."Ballot" includes paper ballots, ballot
cards, and the paper ballot marked by an electronic marking device,
and an electronic record of each vote cast by a voter at an election and
securely transmitted electronically to automatic tabulating equipment in the
polling place.

EFFECTIVE DATE.This section is effective the day following final enactment.

Subd.
7a.Electronic ballot display."Electronic ballot display" means a graphic representation of
a ballot on a computer monitor or screen on which a voter may make vote choices
for candidates and questions for the purpose of marking a nonelectronic ballot or
securely transmitting an electronic ballot to automatic tabulating equipment in
the polling place.

EFFECTIVE DATE.This section is effective the day following final enactment.

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Subd.
8.Electronic
voting system."Electronic
voting system" means a system in which the voter records votes by means of
marking or transmitting a ballot, so that votes may be counted by
automatic tabulating equipment in the polling place where the ballot is cast or
at a counting center.

An
electronic voting system includes automatic tabulating equipment; nonelectronic
ballot markers; electronic ballot markers, including electronic ballot display,
audio ballot reader, and devices by which the voter will register the voter's
voting intent; software used to program automatic tabulators and layout
ballots; computer programs used to accumulate precinct results; ballots;
secrecy folders; system documentation; and system testing results.

EFFECTIVE DATE.This section is effective the day following final enactment.

Subd.
5.Alternation.The provisions of the election laws
requiring the alternation of names of candidates must be observed as far as
practicable by changing the order of the names on an electronic voting system
in the various precincts so that each name appears on the machines or marking
devices used in a municipality substantially an equal number of times in the
first, last, and in each intermediate place in the list or group in which they
belong.However, the arrangement of
candidates' names must be the same on all voting systems used in the same
precinct.If the number of names to be
alternated exceeds the number of precincts, the election official responsible
for providing the ballots, in accordance with subdivision 1, shall determine by
lot the alternation of names.

If an
electronic ballot marker is used with a paper ballot that is not an optical
scan ballot card, the manner of alternation of candidate names on the paper
ballot must be as prescribed for optical scan ballots in this subdivision.If a machine is used to securely transmit
a ballot electronically to automatic tabulating equipment in the polling place,
the manner of alternation of candidate names on the transmitting machine must
be as prescribed for optical scan ballots in this subdivision.

EFFECTIVE DATE.This section is effective the day following final enactment.

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(2) permits every
voter to vote for all candidates and questions for whom or upon which the voter
is legally entitled to vote;

(3)
provides for write-in voting when authorized;

(4)
automatically rejects, except as provided in section 206.84 with respect to
write-in votes, all votes for an office or question when the number of votes
cast on it exceeds the number which the voter is entitled to cast;

(5) permits
a voter at a primary election to select secretly the party for which the voter
wishes to vote;

(6)
automatically rejects all votes cast in a primary election by a voter when the
voter votes for candidates of more than one party; and

(7)
provides every voter an opportunity to verify votes recorded on the permanent
paper ballot or paper record, either visually or using assistive voting
technology, and to change votes or correct any error before the voter's ballot
is cast and counted, produces an individual, discrete, permanent, paper ballot or
paper record of the ballot cast by the voter, and preserves the paper
ballot or paper record as an official record available for use in any
recount.

(b) An
electronic voting system purchased on or after June 4, 2005, may not be
employed unless it:

(1)
accepts and tabulates, in the polling place or at a counting center, a marked
optical scan ballot; or

(2)
creates a marked optical scan ballot that can be tabulated in the polling place
or at a counting center by automatic tabulating equipment certified for use in
this state; or

(3)
securely transmits a ballot electronically to automatic tabulating equipment in
the polling place while creating an individual, discrete, permanent paper
record of each vote on the ballot.

EFFECTIVE DATE.This section is effective the day following final enactment.

Subdivision
1.Contracts
required.(a) The secretary of state,
with the assistance of the commissioner of administration, shall establish one
or more state voting systems contracts.The contracts should, if practical, include provisions for maintenance
of the equipment purchased.The voting
systems contracts must address precinct-based optical scan voting equipment,
and ballot marking equipment for persons with disabilities and other voters,
and assistive voting machines that combine voting methods used for persons with
disabilities with precinct-based optical scan voting machines.The contracts must give the state a
perpetual license to use and modify the software.The contracts must include provisions to escrow the software
source code, as provided in subdivision 2.Bids for voting systems and related election services must be solicited
from each vendor selling or leasing voting systems that have been certified for
use by the secretary of state.The
contracts must be renewed from time to time.

(b)
The secretary of state shall appoint an advisory committee, including
representatives of the state chief information officer, county auditors,
municipal clerks who have had operational experience with the use of electronic
voting systems, and members of the disabilities community to advise the
secretary of state in reviewing and evaluating the merits of proposals
submitted from voting equipment vendors for the state contracts.

(c)
Counties and municipalities may purchase or lease voting systems and obtain
related election services from the state contracts.All counties and municipalities are members of the cooperative
purchasing venture of the Department of Administration for the purpose of this
section.For the purpose of township
elections, counties must

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aggregate orders
under contracts negotiated under this section for products and services and may
apportion the costs of those products and services proportionally among the
townships receiving the products and services.The county is not liable for the timely or accurate delivery of those
products or services.

EFFECTIVE DATE.This section is effective the day following final enactment.

Subd.
2.Plan.(a) Subject to paragraph (b), the
municipal clerk in a municipality where an electronic voting system is used and
the county auditor of a county in which an electronic voting system is used in
more than one municipality and the county auditor of a county in which a
counting center serving more than one municipality is located shall prepare a
plan which indicates acquisition of sufficient facilities, computer time, and
professional services and which describes the proposed manner of complying with
section 206.80.The plan must be
signed, notarized, and submitted to the secretary of state more than 60 days
before the first election at which the municipality uses an electronic voting
system.Prior to July 1 of each
subsequent general election year, the clerk or auditor shall submit to the
secretary of state notification of any changes to the plan on file with the
secretary of state.The secretary of
state shall review each plan for its sufficiency and may request technical
assistance from the Department of Administration or other agency which may be
operating as the central computer authority.The secretary of state shall notify each reporting authority of the
sufficiency or insufficiency of its plan within 20 days of receipt of the plan.The attorney general, upon request of the
secretary of state, may seek a district court order requiring an election
official to fulfill duties imposed by this subdivision or by rules promulgated
pursuant to this section.

(b)
Systems implemented by counties and municipalities in calendar year 2006 are
exempt from paragraph (a) and section 206.58, subdivision 4, if:

(1)
the municipality has fewer than 10,000 residents; and

(2)
a valid county plan was filed by the county auditor of the county in which the
municipality is located.

Within
14 days before election day, the official in charge of elections shall have the
voting system tested to ascertain that the system will correctly mark or
securely transmit to automatic tabulating equipment in the polling place
ballots using all methods supported by the system, including through assistive
technology, and count the votes cast for all candidates and on all
questions.Public notice of the time
and place of the test must be given at least two days in advance by publication
once in official newspapers.The test
must be observed by at least two election judges, who are not of the same major
political party, and must be open to representatives of the political parties,
candidates, the press, and the public.The test must be conducted by (1) processing a preaudited group of
ballots punched or marked to record a predetermined number of valid votes for
each candidate and on each question, and must include for each office one or
more ballot cards which have votes in excess of the number allowed by law in
order to test the ability of the voting system tabulator and electronic ballot
marker to reject those votes; and (2) processing an additional test deck of
ballots marked using the electronic ballot marker for the precinct, including
ballots marked or ballots securely transmitted electronically to automatic
tabulating equipment in the polling place using the electronic ballot
display, audio ballot reader, and any assistive voting technology used with the
electronic ballot marker.If any error
is detected, the cause must be ascertained and corrected and an errorless count
must be made before the voting system may be used in the election.After the completion of the test, the
programs used and ballot cards must be sealed, retained, and disposed of as
provided for paper ballots.

EFFECTIVE DATE.This section is effective the day following final enactment.

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Sec. 34.[206.89]
POSTELECTION REVIEW OF VOTING SYSTEMS.

Subdivision
1.Definition.For purposes of this section "post
election review official" means the election administration official who
is responsible for the conduct of elections in a precinct selected for review
under this section.

Subd.
2.Selection
for review; notice.At the
canvass of the state primary, the county canvassing board in each county must
set the date, time, and place for the postelection review of the state general
election to be held under this section.

At
the canvass of the state general election, the county canvassing boards must
select the precincts to be reviewed.The county canvassing board of a county with fewer than 50,000
registered voters must select at least two precincts for postelection review.The county canvassing board of a county with
between 50,000 and 100,000 registered voters must select at least three
precincts for review.The county
canvassing board of a county with over 100,000 registered voters must select at
least four precincts.The precincts
must be selected by lot at a public meeting.At least one precinct selected in each county must have had more than
150 votes cast at the general election.

The
county auditor must notify the secretary of state of the precincts that have
been chosen for review and the time and place the postelection review for that
county will be conducted, as soon as the decisions are made.The secretary of state must post this
information on the office Web site.

Subd.
3.Scope
and conduct of review.The
county canvassing board shall appoint the post election review official as
defined in subdivision 1.The post
election review must be conducted of the votes cast for President or governor;
United States Senator; and United States Representative.The post election review official may
conduct postelection review of the votes cast for additional offices.

The
postelection review must be conducted in public at the location where the voted
ballots have been securely stored after the state general election or at
another location chosen by the county canvassing board.The post election review official for each
precinct selected must conduct the postelection review and may be assisted by
election judges designated by the post election review official for this
purpose.The party balance requirement
of section 204B.19 applies to election judges designated for the review.The postelection review must consist of a
manual count of the ballots used in the precincts selected and must be
performed in the manner provided by section 204C.21.The postelection review must be conducted in the manner provided
for recounts under section 204C.361 to the extent practicable.The review must be completed no later than
two days before the meeting of the state canvassing board to certify the
results of the state general election.

Subd.
4.Standard
of acceptable performance by voting system.A comparison of the results compiled by the voting system
with the postelection review described in this section must show that the
results of the electronic voting system differed by no more than one-half of
one percent from the manual count of the offices reviewed.Valid votes that have been marked by the
voter outside the vote targets or using a manual marking device that cannot be
read by the voting system must not be included in making the determination
whether the voting system has met the standard of acceptable performance for
any precinct.

Subd.
5.Additional
review.(a) If the
postelection review reveals a difference greater than one-half of one percent,
the post election review official must, within two days, conduct an additional
review of at least three precincts in the same jurisdiction where the
discrepancy was discovered.If all
precincts in that jurisdiction have been reviewed, the county auditor must
immediately publicly select by lot at least three additional precincts for
review.The post election review
official must complete the additional review within two days after the
precincts are selected and report the results immediately to the county
auditor.If the second review also indicates
a difference in the vote totals compiled by the voting system that is greater
than one-half of one percent from the result indicated by the postelection
review, the county auditor must conduct a review of the ballots from all the
remaining precincts in the county.This
review must be completed no later than six weeks after the state general
election.

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(b) If the
results from the countywide reviews from one or more counties comprising in the
aggregate more than ten percent of the total number of persons voting in the
election clearly indicate that an error in vote counting has occurred, the post
election review official must conduct a manual recount of all the ballots in the
district for the affected office.The
recount must be completed and the results reported to the appropriate
canvassing board no later than ten weeks after the state general election.

Subd.
6.Report
of results.Upon completion
of the postelection review, the post election review official must immediately
report the results to the county auditor.The county auditor must then immediately submit the results of the
postelection review electronically or in writing to the secretary of state not
later than two days before the State Canvassing Board meets to canvass the
state general election.The secretary
of state shall report the results of the postelection review at the meeting of
the State Canvassing Board to canvass the state general election.

Subd.
7.Update
of vote totals.If the
postelection review under this section results in a change in the number of
votes counted for any candidate, the revised vote totals must be incorporated
in the official result from those precincts.

Subd.
8.Effect
on voting systems.If a
voting system is found to have failed to record votes accurately and in the
manner provided by the Minnesota election law, the voting system must not be
used at another election until it has been examined and recertified by the secretary
of state.If the voting system failure
is attributable to either its design or to actions of the vendor, the vendor
must forfeit the vendor bond required by section 206.57 and the performance
bond required by section 206.66.

Subd.
9.Costs
of review.The costs of the
postelection review required by this section must be allocated as follows:

(1)
the governing body responsible for each precinct selected for review must pay
the costs incurred for the review conducted under subdivision 2 or 5, paragraph
(a);

(2)
the vendor of the voting system must pay any costs incurred by the secretary of
state to examine and recertify the voting system; and

(3)
the secretary of state must reimburse local units of government for the costs
of any recount required under subdivision 5, paragraph (b).

Subd.
10.Time
for filing election contest.The
appropriate canvass is not completed and the time for notice of a contest of
election does not begin to run until all reviews under this section have been
completed.

Sec.
35.[206.895] SECRETARY OF STATE MONITOR.

The
secretary of state must monitor and evaluate election procedures in precincts
subject to the audit provided for in section 206.89 in at least four precincts
in each congressional district.The precincts
must be chosen by lot by the State Canvassing Board at its meeting to canvass
the state general election.

Subd.
8.Duties
of election officials.The official
in charge of elections in each municipality where an optical scan voting system
is used shall have the electronic ballot marker that examines and marks votes
on ballot cards or the machine that securely transmits a ballot
electronically to automatic tabulating equipment in the polling place and
the automatic tabulating equipment that examines and counts votes as ballot
cards are deposited into ballot boxes put

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in order, set,
adjusted, and made ready for voting when delivered to the election
precincts.Whenever a ballot card
created by an electronic ballot marker certified by the secretary of state is
rejected by an optical scan voting system, two election judges who are members
of different major political parties shall transcribe the votes on the ballot
rejected by the optical scan voting system pursuant to the procedures set forth
in section 206.86, subdivision 5.

EFFECTIVE DATE.This section is effective the day following final enactment.

Sec.
37.[206.91] VOTING MACHINES OPTIONS WORKING GROUP.

(a)
A working group is hereby established to investigate and recommend to the
legislature requirements for additional options for voting equipment that
complies with the requirements of section 301 of the Help America Vote Act,
Public Law 107-252, to provide private and independent voting for individuals
with disabilities.

The
working group must be cochaired by representatives of the Minnesota Disability
Law Center and Citizens for Election Integrity - Minnesota.

(b)
The working group must convene its first meeting by June 30, 2006, and must
report to the legislature by February 15, 2007.

(c)
The working group must include, but is not limited to:

(1)
the disability community;

(2)
the secretary of state;

(3)
county and local election officials;

(4)
major and minor political parties;

(5)(i)
one member of the senate majority caucus and one member of the senate minority
caucus appointed by the Subcommittee on Committees of the Committee on Rules
and Administration; and

(ii)
one member of the house majority caucus and one member of the house minority
caucus appointed by the speaker;

(6)
nonpartisan organizations;

(7)
at least one individual with computer security expertise and knowledge of
elections; and

(8)
members of the public, other than vendors of election equipment, selected by
consensus of the other members, including representatives of language and other
minorities.

(d)
Members of the working group will be selected by:

(1)
a representative of the Office of the Secretary of State;

(2)
a representative of the county election officials;

(3)
the cochairs; and

(4)
two legislators representing each party.

EFFECTIVE DATE.This section is effective the day following final enactment.

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Subd.
2.Information
required.The report to be filed by
a candidate or committee must include:

(1)
the name of the candidate or ballot question;

(2)
the name and address of the person responsible for filing the report;

(3)
the total amount of receipts and expenditures for the period from the last
previous report to five days before the current report is due;

(4)
the amount, date, and purpose for each expenditure; and

(5)
the name, address, and employer, or occupation if self-employed, of any
individual or committee that during the year has made one or more contributions
that in the aggregate are equal to or greater than $500 $100, and the
amount and date of each contribution.

EFFECTIVE DATE.This section is effective January 1, 2007.

Sec.
39.ELECTIONS RULES.

(a)
The rules adopted by the Office of the Secretary of State on August 9, 2004,
pursuant to the authority granted in Laws 2004, chapter 293, article 1, section
39, are made permanent as if they had been adopted pursuant to Minnesota
Statutes, sections 14.05 to 14.28, with only the following express exceptions:

(b)
The secretary of state shall amend the rules pursuant to the good cause
provision in section 14.88, subdivision 1, clause (3), as follows:

(1)
The secretary of state shall amend Minnesota Rules, parts 8200.1100, 8200.1200,
subparts 1a and 1b, 8200.1700, 8200.3700, and 8200.9310, subpart 4 so that
effective August 10, 2006, these rules are identical to the language contained
in them on August 8, 2004.

(2)
The secretary of state shall amend Minnesota Rules, part 8200.5100, subpart 1,
effective August 10, 2006, to add a new clause (4) to paragraph A that adds a
tribal identification card as provided by Minnesota Statutes, section 201.061,
subdivision 3, paragraph (d), clause (1).

(i)
add a new clause (5) to paragraph A that adds a tribal identification card as
provided by Minnesota Statutes, section 201.061, subdivision 3, paragraph (d),
clause (2); and

(ii)
add cellular telephone to the list in paragraph B.

(4)
The secretary of state shall amend Minnesota Rules, part 8200.9115, subpart 1,
effective August 10, 2006, so that the certification at the top of each page of
the polling place roster includes the statement that the individual is not
under a guardianship of the person in which the court order revokes the
individual's right to vote; and that the individual has the right to vote
because, if convicted of a felony, the individual's felony sentence has expired
(been completed) or the individual has been discharged from the individual's
sentence.

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(5) The
secretary of state shall amend Minnesota Rules, part 8210.0100, subpart 2,
effective August 10, 2006, so that the form of the affidavit of eligibility
includes certification by the individual that the individual is not under a
guardianship of the person in which the court order revokes the individual's right
to vote, and that the individual has the right to vote because, if convicted of
a felony, the individual's felony sentence has expired (been completed) or the
individual has been discharged from the individual's sentence.

(v)
add a new Step to be numbered Step 10 and placed between the current Step 9 and
Step 10 that directs the voter, if the voter has been provided with an
additional envelope to conceal the signature, identification, and other
information, to place the white ballot return envelope into the additional
envelope; and directs the voter, if the voter has been provided a white ballot
envelope with an additional flap that when sealed, conceals the signature,
identification, and other information, to make sure that the flap is properly
in place to conceal that information.

(7)
The secretary of state shall amend Minnesota Rules, part 8200.5100, subpart 2,
item B, to add cellular telephone to the list in that item.

EFFECTIVE DATE.This section is effective the day following final enactment.

(a) License education
courses must be approved in advance by the commissioner.Each sponsor who offers a license education
course must have at least one coordinator, approved by the commissioner,
be approved by the commissioner.Each
approved sponsor must have at least one coordinator who meets the criteria
specified in Minnesota Rules, chapter 2809, and who is responsible for
supervising the educational program and assuring compliance with all laws and
rules. "Sponsor" means any person or entity offering approved
education.

(b) For coordinators with an
initial approval date before August 1, 2005, approval will expire on December
31, 2005.For courses with an initial
approval date on or before December 31, 2000, approval will expire on April 30,
2006.For courses with an initial
approval date after January 1, 2001, but before August 1, 2005, approval will
expire on April 30, 2007.

(1) initial course approval,
$10 for each hour or fraction of one hour of education course approval
sought.Initial course approval expires
on the last day of the 24th month after the course is approved;

(2) renewal of course
approval, $10 per course.Renewal of
course approval expires on the last day of the 24th month after the course is
renewed;

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(3) initial coordinator
sponsor approval, $100.Initial
coordinator approval expires on the last day of the 24th month after the
coordinator is approved; Initial sponsor approval issued under this
section is valid for a period not to exceed 24 months and expires on January 31
of the renewal year assigned by the commissioner.Active sponsors who have at least one approved coordinator as of
the effective date of this section are deemed to be approved sponsors and are
not required to submit an initial application for sponsor approval; and

(4) renewal of coordinator
sponsor approval, $10.Renewal
of coordinator approval expires on the last day of the 24th month after the
coordinator is renewed.Each
renewal of sponsor approval is valid for a period of 24 months.Active sponsors who have at least one
approved coordinator as of the effective date of this section will have an
expiration date of January 31, 2008.

EFFECTIVE DATE.This section is effective the day following final enactment.

(a) The purpose of this
chapter is to create a legal framework within which service contracts may be
sold in this state.

(b) The following are exempt
from this chapter:

(1) warranties;

(2) maintenance agreements;

(3) warranties, service
contracts, or maintenance agreements offered by public utilities, as defined in
section 216B.02, subdivision 4, or an entity or operating unit owned by or
under common control with a public utility;

(4) service contracts sold
or offered for sale to persons other than consumers;

(5) service contracts on
tangible property where the tangible property for which the service contract is
sold has a purchase price of $250 or less, exclusive of sales tax;

(7) service contracts for
home security equipment installed by a licensed technology systems contractor; and

(8) motor club membership
contracts that typically provide roadside assistance services to motorists
stranded for reasons that include, but are not limited to, mechanical breakdown
or adverse road conditions; and

(9) home warranties not
subject to chapter 327A, 515, 515A, or 515B.

(c) Except for the
agreements covered by paragraph (b), clause (9), the types of agreements
referred to in paragraph (b) are not subject to chapters 60A to 79A, except as
otherwise specifically provided by law.

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(2) annuity;

(3) title;

(4) accident and sickness;

(5) credit;

(6) vendor's single interest
or collateral protection or any similar insurance protecting the interests of a
creditor arising out of a creditor debtor transaction;

(7) mortgage guaranty;

(8) financial guaranty or
other forms of insurance offering protection against investment risks;

(9) ocean marine;

(10) a transaction or
combination of transactions between a person, including affiliates of the
person, and an insurer, including affiliates of the insurer, that involves the
transfer of investment or credit risk unaccompanied by transfer of insurance
risk; or

(11) insurance provided by
or guaranteed by government; or.

(12) insurance of warranties
or service contracts, including insurance that provides for the repair,
replacement, or services of goods or property, or indemnification for repair,
replacement or service, for the operation or structural failure of the goods or
property due to a defect in materials, workmanship or normal wear and tear, or
provides reimbursement for the liability insured by the user of agreement or
service contracts that provide these benefits.

Subd. 3.Disapproval.(a) The commissioner shall, within 60
days after the filing of any form, disapprove the form:

(1) if the benefits provided
are unreasonable in relation to the premium charged;

(2) if the safety and
soundness of the company would be threatened by the offering of an excess rate
of interest on the policy or contract;

(3) if it contains a
provision or provisions which are unlawful, unfair, inequitable, misleading, or
encourages misrepresentation of the policy; or

(4) if the form, or its
provisions, is otherwise not in the public interest.It shall be unlawful for the company to issue any policy in the
form so disapproved.If the
commissioner does not within 60 days after the filing of any form, disapprove
or otherwise object, the form shall be deemed approved.

(b) When an insurer or the
Minnesota Comprehensive Health Association fails to respond to an objection or
inquiry within 60 days, the filing is automatically disapproved.A resubmission is required if action by the
Department of Commerce is subsequently requested.An additional filing fee is required for the resubmission.

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(c) For purposes of paragraph
(a), clause (2), an excess rate of interest is a rate of interest exceeding
the rate of interest determined by subtracting three percentage points from
Moody's corporate bond yield average as most recently available.

Subdivision 1.Continuation
of coverage.Every group insurance
policy issued or renewed within this state after August 1, 1987, providing
coverage for life insurance benefits shall contain a provision that permits
covered employees who are voluntarily or involuntarily terminated or laid off
from their employment, if the policy remains in force for any active employee
of the employer, to elect to continue the coverage for themselves and their
dependents.If the policy includes
other benefits, the election provided by this section extends to those other
benefits.

An employee is considered to
be laid off from employment if there is a reduction in hours to the point where
the employee is no longer eligible for coverage under the group life insurance policy.Termination does not include discharge for
gross misconduct.

Subd. 3.Notice
of options.Upon termination of or
layoff from employment of a covered employee, the employer shall inform the
employee of:

(1) the employee's right to
elect to continue the coverage;

(2) the amount the employee
must pay monthly to the employer to retain the coverage;

(3) the manner in which and
the office of the employer to which the payment to the employer must be made;
and

(4) the time by which the
payments to the employer must be made to retain coverage.

The employee has 60 days
within which to elect coverage.The
60-day period shall begin to run on the date coverage would otherwise terminate
or on the date upon which notice of the right to coverage is received,
whichever is later.

If the covered employee or
covered dependent dies during the 60-day election period and before the covered
employee makes an election to continue or reject continuation, then the covered
employee will be considered to have elected continuation of coverage.The estate ofbeneficiary
previously selected by the former employee or covered dependent would then
be entitled to a death benefit equal to the amount of insurance that could have
been continued less any unpaid premium owing as of the date of death.

Notice must be in writing
and sent by first class mail to the employee's last known address which the
employee has provided to the employer.

A notice in substantially
the following form is sufficient: "As a terminated or laid off employee,
the law authorizes you to maintain your group insurance benefits, in an amount
equal to the amount of insurance in effect on the date you terminated or were
laid off from employment, for a period of up to 18 months.To do so, you must notify your former
employer within 60 days of your receipt of this notice that you intend to
retain this coverage and must make a monthly payment of $............ at
............. by the ............. of each month."

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Subd. 3.Standards
for disapproval.(a) The
commissioner shall, within 60 days after the filing of any form or rate,
disapprove the form or rate:

(1) if the benefits provided
are not reasonable in relation to the premium charged;

(2) if it contains a
provision or provisions which are unjust, unfair, inequitable, misleading,
deceptive or encourage misrepresentation of the health plan form, or otherwise
does not comply with this chapter, chapter 62L, or chapter 72A;

(3) if the proposed premium
rate is excessive or not adequate; or

(4) the actuarial reasons
and data submitted do not justify the rate.

The party proposing a rate
has the burden of proving by a preponderance of the evidence that it does not
violate this subdivision.

In determining the
reasonableness of a rate, the commissioner shall also review all administrative
contracts, service contracts, and other agreements to determine the
reasonableness of the cost of the contracts or agreement and effect of the
contracts on the rate.If the commissioner
determines that a contract or agreement is not reasonable, the commissioner
shall disapprove any rate that reflects any unreasonable cost arising out of
the contract or agreement.The
commissioner may require any information that the commissioner deems necessary
to determine the reasonableness of the cost.

For the purposes of this
subdivision, the commissioner shall establish by rule a schedule of minimum
anticipated loss ratios which shall be based on (i) the type or types of
coverage provided, (ii) whether the policy is for group or individual coverage,
and (iii) the size of the group for group policies.Except for individual policies of disability or income protection
insurance, the minimum anticipated loss ratio shall not be less than 50 percent
after the first year that a policy is in force.All applicants for a policy shall be informed in writing at the
time of application of the anticipated loss ratio of the policy.
"Anticipated loss ratio" means the ratio at the time of filing, at
the time of notice of withdrawal under subdivision 4a, or at the time of
subsequent rate revision of the present value of all expected future benefits,
excluding dividends, to the present value of all expected future premiums.

If the commissioner notifies
a health carrier that has filed any form or rate that it does not comply with
this chapter, chapter 62L, or chapter 72A, it shall be unlawful for the health
carrier to issue or use the form or rate.In the notice the commissioner shall specify the reasons for disapproval
and state that a hearing will be granted within 20 days after request in
writing by the health carrier.

The 60-day period within
which the commissioner is to approve or disapprove the form or rate does not
begin to run until a complete filing of all data and materials required by statute
or requested by the commissioner has been submitted.

However, if the supporting
data is not filed within 30 days after a request by the commissioner, the rate
is not effective and is presumed to be an excessive rate.

(b) When an insurer or the Minnesota
Comprehensive Health Association fails to respond to an objection or inquiry
within 60 days, the filing is automatically disapproved.A resubmission is required if action by the
Department of Commerce is subsequently requested.An additional filing fee is required for the resubmission.

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Subdivision 1.Applicability.(a) No health plan shall be offered, sold,
or issued to a resident of this state, or to cover a resident of this state,
unless the health plan complies with subdivision 2.

(b) Health plans providing
benefits under health care programs administered by the commissioner of human
services are not subject to the limits described in subdivision 2 but are
subject to the right of subrogation provisions under section 256B.37 and the
lien provisions under section 256.015; 256B.042; 256D.03, subdivision 8; or
256L.03, subdivision 6.

For purposes of this
section, "health plan" includes coverage that is excluded under
section 62A.011, subdivision 3, clauses (4), (7), and (10).

Subdivision 1.Continuation
of coverage.Every group insurance
policy, group subscriber contract, and health care plan included within the
provisions of section 62A.16, except policies, contracts, or health care plans
covering employees of an agency of the federal government, shall contain a
provision which permits every covered employee who is voluntarily or
involuntarily terminated or laid off from employment and every covered
dependent of the covered employee, if the policy, contract, or health care
plan remains in force for active employees of the employer, to elect to
continue the coverage for the employee and dependents.

An employee shall be
considered to be laid off from employment if there is a reduction in hours to
the point where the employee is no longer eligible under the policy, contract,
or health care plan.Termination shall
not include discharge for gross misconduct.

Upon request by the
terminated or laid off employee or any covered dependent, a health
carrier must provide the instructions necessary to enable the employee or
dependent to elect and receive continuation of coverage through
the insurer in place of the former employer.

Subd. 2.Responsibility
of employee.Every covered employee
or dependent electing to continue coverage shall pay the former
employer, on a monthly basis, the cost of the continued coverage.The policy, contract, or plan must require
the group policyholder or contract holder to, upon request, provide the
employee or dependent with written verification from the insurer of the
cost of this coverage promptly at the time of eligibility for this coverage and
at any time during the continuation period.If the policy, contract, or health care plan is administered by a trust,
every covered employee or dependent electing to continue coverage shall
pay the trust the cost of continued coverage according to the eligibility rules
established by the trust.In no event
shall the amount of premium charged exceed 102 percent of the cost to the plan
for such period of coverage for similarly situated employees with respect to
whom neither termination nor layoff has occurred, without regard to whether
such cost is paid by the employer or employee.The employee and every covered dependent shall be eligible to
continue the coverage until the employee becomes covered under another group
health plan, or for a period of 18 months after the termination of or lay off
from employment, whichever is shorter.If
the employee becomes covered under another group policy, contract, or health
plan that does not include dependent coverage, every covered dependent remains
eligible to continue coverage with the former employer subject to the
conditions specified in this subdivision.If the employee or any covered dependent becomes covered
under another group policy, contract, or health plan and the new group policy,
contract, or health plan contains any preexisting condition limitations, the
employee or dependent may, subject to the 18-month maximum continuation
limit, continue coverage with the former employer until the preexisting
condition limitations have been satisfied.The new policy, contract, or health plan is primary except as to the
preexisting condition.In the case of a
newborn child who is a dependent of the employee, the new policy, contract, or
health plan is primary upon the date of birth of the child, regardless of which
policy, contract, or health plan coverage is deemed primary for the mother of
the child.

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Subd. 5.Notice
of options.Upon the termination of
or lay off from employment of an eligible employee, the employer shall inform
the employee within ten days after termination or lay off of:

(a) the right to elect to
continue the coverage;

(b) the amount the employee
must pay monthly to the employer or health carrier to retain the
coverage;

(c) the manner in which and
the office of the employer or health carrier to which the payment to the
employer or health carrier must be made; and

(d) the time by which the
payments to the employer or health carrier must be made to retain coverage.

If the policy, contract, or
health care plan is administered by a trust, the employer is relieved of the
obligation imposed by clauses (a) to (d).The trust shall inform the employee of the information required by clauses
(a) to (d).

The employee shall have 60
days within which to elect coverage.The 60-day period shall begin to run on the date plan coverage would
otherwise terminate or on the date upon which notice of the right to coverage
is received, whichever is later.

Notice must be in writing
and sent by first class mail to the employee's last known address which the
employee has provided the employer or trust.

A notice in substantially
the following form shall be sufficient: "As a terminated or laid off
employee, the law authorizes you to maintain your group medical insurance for a
period of up to 18 months.To do so you
must notify your former employer or health carrier within 60 days of
your receipt of this notice that you intend to retain this coverage and must
make a monthly payment of $.......... to ........... at .......... by the
............... of each month."

Sec. 13.Minnesota Statutes 2004, section 62A.27, is
amended to read:

62A.27 COVERAGE OF ADOPTED CHILDREN.

(a) A health plan that
provides coverage to a Minnesota resident must cover adopted children of the
insured, subscriber, participant, or enrollee on the same basis as other
dependents.Consequently, the plan
shall not contain any provision concerning preexisting condition limitations,
insurability, eligibility, or health underwriting approval concerning children
placed for adoption with the participant.

(b) The coverage required by
this section is effective from the date of placement for adoption.For purposes of this section, placement for
adoption means the assumption and retention by a person of a legal obligation
for total or partial support of a child in anticipation of adoption of the
child.The child's placement with a
person terminates upon the termination of the legal obligation for total or
partial support.

(c) For the purpose of this
section, health plan includes:

(1) coverage offered by
community integrated service networks;

(2) coverage that is
designed solely to provide dental or vision care; and

(3) any plan under the
federal Employee Retirement Income Security Act of 1974 (ERISA), United States
Code, title 29, sections 1001 to 1461.

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(d) No policy or
contract covered by this section may require notification to a health carrier
as a condition for this dependent coverage.However, if the policy or contract mandates an additional premium for
each dependent, the health carrier is entitled to all premiums that would have
been collected had the health carrier been aware of the additional
dependent.The health carrier may
withhold payment of any health benefits for the new dependent until it has been
compensated with the applicable premium which would have been owed if the
health carrier had been informed of the additional dependent immediately.

A health plan, including a
plan providing the coverage specified in section 62A.011, subdivision 3, clause
(10), must provide coverage for: (1) all physician prescribed medically
appropriate and necessary equipment and supplies used in the management and
treatment of diabetes not otherwise covered for that person under Medicare
or Medicare Part D; and (2) diabetes outpatient self-management training
and education, including medical nutrition therapy, that is provided by a
certified, registered, or licensed health care professional working in a
program consistent with the national standards of diabetes self-management
education as established by the American Diabetes Association.Coverage must include persons with
gestational, type I or type II diabetes.Coverage required under this section is subject to the same deductible
or coinsurance provisions applicable to the plan's hospital, medical expense,
medical equipment, or prescription drug benefits.A health carrier may not reduce or eliminate coverage due to this
requirement.

EFFECTIVE DATE.This section is effective January 1, 2006.

Sec. 15.[62A.3161]
MEDICARE SUPPLEMENT PLAN WITH 50 PERCENT COVERAGE.

The Medicare supplement plan
with 50 percent coverage must have a level of coverage that will provide:

(1) 100 percent of Medicare
Part A hospitalization coinsurance plus coverage for 365 days after Medicare
benefits end;

(2) coverage for 50 percent
of the Medicare Part A inpatient hospital deductible amount per benefit period
until the out-of-pocket limitation is met as described in clause (8);

(3) coverage for 50 percent
of the coinsurance amount for each day used from the 21st through the 100th day
in a Medicare benefit period for posthospital skilled nursing care eligible
under Medicare Part A until the out-of-pocket limitation is met as described in
clause (8);

(4) coverage for 50 percent
of cost sharing for all Medicare Part A eligible expenses and respite care
until the out-of-pocket limitation is met as described in clause (8);

(5) coverage for 50 percent,
under Medicare Part A or B, of the reasonable cost of the first three pints of
blood, or equivalent quantities of packed red blood cells, as defined under
federal regulations, unless replaced according to federal regulations, until
the out-of-pocket limitation is met as described in clause (8);

(6) except for coverage
provided in this clause, coverage for 50 percent of the cost sharing otherwise
applicable under Medicare Part B, after the policyholder pays the Medicare Part
B deductible, until the out-of-pocket limitation is met as described in clause
(8);

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(7) coverage of
100 percent of the cost sharing for Medicare Part B preventive services and
diagnostic procedures for cancer screening described in section 62A.30 after
the policyholder pays the Medicare Part B deductible; and

(8) coverage of 100 percent
of all cost sharing under Medicare Parts A and B for the balance of the
calendar year after the individual has reached the out-of-pocket limitation on
annual expenditures under Medicare Parts A and B of $4,000 in 2006, indexed
each year by the appropriate inflation adjustment by the secretary of the
United States Department of Health and Human Services.

Sec. 16.[62A.3162]
MEDICARE SUPPLEMENT PLAN WITH 75 PERCENT COVERAGE.

The basic Medicare supplement
plan with 75 percent coverage must have a level of coverage that will provide:

(1) 100 percent of Medicare
Part A hospitalization coinsurance plus coverage for 365 days after Medicare
benefits end;

(2) coverage for 75 percent
of the Medicare Part A inpatient hospital deductible amount per benefit period
until the out-of-pocket limitation is met as described in clause (8);

(3) coverage for 75 percent
of the coinsurance amount for each day used from the 21st through the 100th day
in a Medicare benefit period for posthospital skilled nursing care eligible
under Medicare Part A until the out-of-pocket limitation is met as described in
clause (8);

(4) coverage for 75 percent
of cost sharing for all Medicare Part A eligible expenses and respite care until
the out-of-pocket limitation is met as described in clause (8);

(5) coverage for 75 percent,
under Medicare Part A or B, of the reasonable cost of the first three pints of
blood, or equivalent quantities of packed red blood cells, as defined under federal
regulations, unless replaced according to federal regulations until the
out-of-pocket limitation is met as described in clause (8);

(6) except for coverage
provided in this clause, coverage for 75 percent of the cost sharing otherwise
applicable under Medicare Part B after the policyholder pays the Medicare Part
B deductible until the out-of-pocket limitation is met as described in clause
(8);

(7) coverage of 100 percent
of the cost sharing for Medicare Part B preventive services and diagnostic procedures
for cancer screening described in section 62A.30 after the policyholder pays
the Medicare Part B deductible; and

(8) coverage of 100 percent
of all cost sharing under Medicare Parts A and B for the balance of the
calendar year after the individual has reached the out-of-pocket limitation on
annual expenditures under Medicare Parts A and B of $2,000 in 2006, indexed
each year by the appropriate inflation adjustment by the Secretary of the
United States Department of Health and Human Services.

Subd. 9.Required
filing.No service plan corporation
shall deliver or issue for delivery in this state any subscriber contract,
endorsement, rider, amendment or application until a copy of the form thereof
has been filed with the commissioner, subject to disapproval by the
commissioner.Any such form issued or
in use on August 1, 1971, if filed with the commissioner within 60 days after
August 1, 1971, shall be deemed filed upon receipt by the commissioner.When an insurer, service plan
corporation, or the Minnesota Comprehensive Health Association fails to respond
to an objection or inquiry within 60 days, the filing is automatically
disapproved.A resubmission is

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required if
action by the Department of Commerce is subsequently requested.An additional filing fee is required for the
resubmission.The commissioner also may by
regulation exempt from filing those subscriber contracts issued to a group of
not less than 300 subscribers, or to other groups upon such reasonable
conditions and restrictions as the commissioner may require.

Subd. 10.Filing
or disapproval.Except as otherwise
provided in subdivision 9, all forms received by the commissioner shall be
deemed filed 60 days after received unless disapproved by order transmitted to
the corporation stating that the form used in a specified respect is contrary
to law, contains a provision or provisions which are unfair, inequitable,
misleading, inconsistent or ambiguous, or is in part illegible.It shall be unlawful to issue or use a
document disapproved by the commissioner.When an insurer, service plan corporation, or the Minnesota
Comprehensive Health Association fails to respond to an objection or inquiry
within 60 days, the filing is automatically disapproved.A resubmission is required if action by the
Department of Commerce is subsequently requested.An additional filing fee is required for the resubmission.

Subd. 3.Duties
of writing carrier.The writing
carrier shall perform all administrative and claims payment functions required
by this section.The writing carrier
shall provide these services for a period of three five years,
unless a request to terminate is approved by the commissioner.The commissioner shall approve or deny a
request to terminate within 90 days of its receipt.A failure to make a final decision on a request to terminate
within the specified period shall be deemed to be an approval.Six months prior to the expiration of each three-year
five-year period, the association shall invite submissions of policy forms
from members of the association, including the writing carrier.The association shall follow the provisions
of subdivision 2 in selecting a writing carrier for the subsequent three-year
five-year period.

Subd. 5.Terminated
employees.An employee who is
voluntarily or involuntarily terminated or laid off from employment and unable
to exercise the option to continue coverage under section 62A.17, and who is
a Minnesota resident and who is otherwise eligible, may enroll in the
comprehensive health insurance plan, by submitting an application that is
received by the writing carrier no later than 90 days after termination or
layoff, with a waiver of the preexisting condition limitation set forth in
subdivision 3 and a waiver of the evidence of rejection set forth in
subdivision 1, paragraph (c).

EFFECTIVE DATE.This section is effective the day following final enactment.

(1) a health benefit plan,
as defined in this section, but without regard to whether it is issued to a
small employer and including blanket accident and sickness insurance, other
than accident-only coverage, as defined in section 62A.11;

(2) part A or part B of Medicare;

(3) medical assistance under
chapter 256B;

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(4) general
assistance medical care under chapter 256D;

(5) MCHA;

(6) a self-insured health
plan;

(7) the MinnesotaCare
program established under section 256L.02;

(8) a plan provided under
section 43A.316, 43A.317, or 471.617;

(9) the Civilian Health and
Medical Program of the Uniformed Services (CHAMPUS) or other coverage provided
under United States Code, title 10, chapter 55;

(11) a medical care program
of the Indian Health Service or of a tribal organization;

(12) the federal Employees
Health Benefits Plan, or other coverage provided under United States Code,
title 5, chapter 89;

(13) a health benefit plan
under section 5(e) of the Peace Corps Act, codified as United States Code,
title 22, section 2504(e);

(14) a health plan; or

(15) a plan similar to any
of the above plans provided in this state or in another state as determined by
the commissioner.;

(16) any plan established or
maintained by a state, the United States government, or a foreign country, or
any political subdivision of a state, the United States government, or a
foreign country that provides health coverage to individuals who are enrolled
in the plan; or

Subd. 2.Jurisdiction.Sections 62M.01 to 62M.16 apply to any
insurance company licensed under chapter 60A to offer, sell, or issue a policy
of accident and sickness insurance as defined in section 62A.01; a health
service plan licensed under chapter 62C; a health maintenance organization
licensed under chapter 62D; the Minnesota Comprehensive Health Association
created under chapter 62E; a community integrated service network licensed
under chapter 62N; an accountable provider network operating under chapter 62T;
a fraternal benefit society operating under chapter 64B; a joint self-insurance
employee health plan operating under chapter 62H; a multiple employer welfare
arrangement, as defined in section 3 of the Employee Retirement Income Security
Act of 1974 (ERISA), United States Code, title 29, section 1103, as amended; a
third party administrator licensed under section 60A.23, subdivision 8, that
provides utilization review services for the administration of benefits under a
health benefit plan as defined in section 62M.02; or any entity performing
utilization review on behalf of a business entity in this state pursuant to a
health benefit plan covering a Minnesota resident.

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Subd. 3.Claims
filing.Unless otherwise provided by
contract, by section 16A.124, subdivision 4a, or by federal law, or
unless the contract provides for a shorter time period, the health care
providers and facilities specified in subdivision 2 must submit their charges
to a health plan company or third-party administrator within six months from
the date of service or the date the health care provider knew or was informed
of the correct name and address of the responsible health plan company or
third-party administrator, whichever is later.A health care provider or facility that does not make an initial
submission of charges within the six-month period shall not be reimbursed for
the charge and may not collect the charge from the recipient of the service or
any other payer.The six-month
submission requirement may be extended to 12 months in cases where a health
care provider or facility specified in subdivision 2 has determined and can
substantiate that it has experienced a significant disruption to normal operations
that materially affects the ability to conduct business in a normal manner and
to submit claims on a timely basis.This subdivision also applies to all health care providers and
facilities that submit charges to workers' compensation payers for treatment of
a workers' compensation injury compensable under chapter 176, or to reparation
obligors for treatment of an injury compensable under chapter 65B.

Subd. 5a.Rental
vehicles.(a) Every plan of
reparation security insuring a natural person as named insured, covering
private passenger vehicles as defined under section 65B.001, subdivision 3, and
pickup trucks and vans as defined under section 168.011 must provide that all
of the obligation for damage and loss of use to a rented private passenger
vehicle, including pickup trucks and vans as defined under section 168.011, and
rented trucks with a registered gross vehicle weight of 26,000 pounds or less
would be covered by the property damage liability portion of the plan.This subdivision does not apply to plans of
reparation security covering only motor vehicles registered under section
168.10, subdivision 1a, 1b, 1c, or 1d, or recreational equipment as defined
under section 168.011.The obligation
of the plan must not be contingent on fault or negligence.In all cases where the plan's property
damage liability coverage is less than $35,000, the coverage available under
the subdivision must be $35,000.Other
than as described in this paragraph or in paragraph (j), nothing in this
section amends or alters the provisions of the plan of reparation security as
to primacy of the coverages in this section.

(b) A vehicle is rented for
purposes of this subdivision:

(1) if the rate for the use
of the vehicle is determined on a monthly, weekly, or daily basis; or

(2) during the time that a
vehicle is loaned as a replacement for a vehicle being serviced or repaired
regardless of whether the customer is charged a fee for the use of the vehicle.

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A vehicle is not
rented for the purposes of this subdivision if the rate for the vehicle's use
is determined on a period longer than one month or if the term of the rental
agreement is longer than one month.A
vehicle is not rented for purposes of this subdivision if the rental agreement
has a purchase or buyout option or otherwise functions as a substitute for
purchase of the vehicle.

(c) The policy or
certificate issued by the plan must inform the insured of the application of
the plan to private passenger rental vehicles, including pickup trucks and vans
as defined under section 168.011, and that the insured may not need to purchase
additional coverage from the rental company.

(d) Where an insured has two
or more vehicles covered by a plan or plans of reparation security containing
the rented motor vehicle coverage required under paragraph (a), the insured may
select the plan the insured wishes to collect from and that plan is entitled to
a pro rata contribution from the other plan or plans based upon the property
damage limits of liability.If the
person renting the motor vehicle is also covered by the person's employer's
insurance policy or the employer's automobile self-insurance plan, the
reparation obligor under the employer's policy or self-insurance plan has
primary responsibility to pay claims arising from use of the rented vehicle.

(e) A notice advising the
insured of rental vehicle coverage must be given by the reparation obligor to
each current insured with the first renewal notice after January 1, 1989.The notice must be approved by the
commissioner of commerce.The
commissioner may specify the form of the notice.

(f) When a motor vehicle is
rented in this state, there must be attached to the rental contract a separate
form containing a written notice in at least 10-point bold type, if printed, or
in capital letters, if typewritten, which states:

Under Minnesota law, a
personal automobile insurance policy issued in Minnesota must cover the rental
of this motor vehicle against damage to the vehicle and against loss of use of
the vehicle.Therefore, purchase of any
collision damage waiver or similar insurance affected in this rental contract
is not necessary if your policy was issued in Minnesota.

No collision damage waiver
or other insurance offered as part of or in conjunction with a rental of a
motor vehicle may be sold unless the person renting the vehicle provides a
written acknowledgment that the above consumer protection notice has been read
and understood.

(g) When damage to a rented
vehicle is covered by a plan of reparation security as provided under paragraph
(a), the rental contract must state that payment by the reparation obligor
within the time limits of section 72A.201 is acceptable, and prior payment by
the renter is not required.

(h) Compensation for the
loss of use of a damaged rented motor vehicle is limited to a period no longer
than 14 days.

(i)(1) For purposes of this
paragraph, "rented motor vehicle" means a rented vehicle described in
paragraph (a), using the definition of "rented" provided in paragraph
(b).

(2) Notwithstanding section
169.09, subdivision 5a, an owner of a rented motor vehicle is not vicariously
liable for legal damages resulting from the operation of the rented motor
vehicle in an amount greater than $100,000 because of bodily injury to one
person in any one accident and, subject to the limit for one person, $300,000 because
of injury to two or more persons in any one accident, and $50,000 because of
injury to or destruction of property of others in any one accident, if the
owner of the rented motor vehicle has in effect, at the time of the accident, a
policy of insurance or self-insurance, as provided in section 65B.48,
subdivision 3, covering losses up to at least the amounts set forth in this
paragraph.Nothing in this paragraph
alters or affects the obligations of an owner of a

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rented motor
vehicle to comply with the requirements of compulsory insurance through a
policy of insurance as provided in section 65B.48, subdivision 2, or through
self-insurance as provided in section 65B.48, subdivision 3; or with the
obligations arising from section 72A.125 for products sold in conjunction with
the rental of a motor vehicle.Nothing
in this paragraph alters or affects liability, other than vicarious liability,
of an owner of a rented motor vehicle.

(3) (2) The dollar amounts stated
in this paragraph shall be adjusted for inflation based upon the Consumer Price
Index for all urban consumers, known as the CPI-U, published by the United
States Bureau of Labor Statistics.The
dollar amounts stated in this paragraph are based upon the value of that index
for July 1995, which is the reference base index for purposes of this
paragraph.The dollar amounts in this
paragraph shall change effective January 1 of each odd-numbered year based upon
the percentage difference between the index for July of the preceding year and
the reference base index, calculated to the nearest whole percentage
point.The commissioner shall announce
and publish, on or before September 30 of the preceding year, the changes in
the dollar amounts required by this paragraph to take effect on January 1 of
each odd-numbered year.The
commissioner shall use the most recent revision of the July index available as
of September 1.Changes in the dollar
amounts must be in increments of $5,000, and no change shall be made in a
dollar amount until the change in the index requires at least a $5,000
change.If the United States Bureau of
Labor Statistics changes the base year upon which the CPI-U is based, the
commissioner shall make the calculations necessary to convert from the old base
year to the new base year.If the CPI-U
is discontinued, the commissioner shall use the available index that is most
similar to the CPI-U.

(j) The plan of reparation
security covering the owner of a rented motor vehicle is excess of any residual
liability coverage insuring an operator of a rented motor vehicle if the
vehicle is loaned as a replacement for a vehicle being serviced or repaired,
regardless of whether a fee is charged for use of the vehicle, provided that
the vehicle so loaned is owned by the service or repair business.

Sec. 26.Minnesota Statutes 2004, section 70A.07, is
amended to read:

70A.07 RATES AND FORMS OPEN TO INSPECTION.

All rates, supplementary
rate information, and forms furnished to the commissioner under this chapter
shall, as soon as the commissioner's review has been completed within
ten days of their effective date, be open to public inspection at any
reasonable time.

Subd. 6.Standards
for automobile insurance claims handling, settlement offers, and agreements.In addition to the acts specified in
subdivisions 4, 5, 7, 8, and 9, the following acts by an insurer, adjuster, or
a self-insured or self-insurance administrator constitute unfair settlement
practices:

(1) if an automobile
insurance policy provides for the adjustment and settlement of an automobile
total loss on the basis of actual cash value or replacement with like kind and
quality and the insured is not an automobile dealer, failing to offer one of
the following methods of settlement:

(a) comparable and available
replacement automobile, with all applicable taxes, license fees, at least pro
rata for the unexpired term of the replaced automobile's license, and other
fees incident to the transfer or evidence of ownership of the automobile paid,
at no cost to the insured other than the deductible amount as provided in the
policy;

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(b) a cash
settlement based upon the actual cost of purchase of a comparable automobile,
including all applicable taxes, license fees, at least pro rata for the
unexpired term of the replaced automobile's license, and other fees incident to
transfer of evidence of ownership, less the deductible amount as provided in
the policy.The costs must be
determined by:

(i) the cost of a comparable
automobile, adjusted for mileage, condition, and options, in the local market
area of the insured, if such an automobile is available in that area; or

(ii) one of two or more
quotations obtained from two or more qualified sources located within the local
market area when a comparable automobile is not available in the local market
area.The insured shall be provided the
information contained in all quotations prior to settlement; or

(iii) any settlement or
offer of settlement which deviates from the procedure above must be documented
and justified in detail.The basis for
the settlement or offer of settlement must be explained to the insured;

(2) if an automobile
insurance policy provides for the adjustment and settlement of an automobile
partial loss on the basis of repair or replacement with like kind and quality
and the insured is not an automobile dealer, failing to offer one of the
following methods of settlement:

(a) to assume all costs,
including reasonable towing costs, for the satisfactory repair of the motor
vehicle.Satisfactory repair includes
repair of both obvious and hidden damage as caused by the claim incident.This assumption of cost may be reduced by
applicable policy provision; or

(b) to offer a cash
settlement sufficient to pay for satisfactory repair of the vehicle.Satisfactory repair includes repair of
obvious and hidden damage caused by the claim incident, and includes reasonable
towing costs;

(3) regardless of whether
the loss was total or partial, in the event that a damaged vehicle of an
insured cannot be safely driven, failing to exercise the right to inspect
automobile damage prior to repair within five business days following receipt
of notification of claim.In other
cases the inspection must be made in 15 days;

(4) regardless of whether
the loss was total or partial, requiring unreasonable travel of a claimant or
insured to inspect a replacement automobile, to obtain a repair estimate, to
allow an insurer to inspect a repair estimate, to allow an insurer to inspect
repairs made pursuant to policy requirements, or to have the automobile
repaired;

(5) regardless of whether
the loss was total or partial, if loss of use coverage exists under the
insurance policy, failing to notify an insured at the time of the insurer's
acknowledgment of claim, or sooner if inquiry is made, of the fact of the
coverage, including the policy terms and conditions affecting the coverage and
the manner in which the insured can apply for this coverage;

(6) regardless of whether
the loss was total or partial, failing to include the insured's deductible in
the insurer's demands under its subrogation rights.Subrogation recovery must be shared at least on a proportionate
basis with the insured, unless the deductible amount has been otherwise
recovered by the insured, except that when an insurer is recovering directly
from an uninsured third party by means of installments, the insured must
receive the full deductible share as soon as that amount is collected and
before any part of the total recovery is applied to any other use.No deduction for expenses may be made from
the deductible recovery unless an attorney is retained to collect the recovery,
in which case deduction may be made only for a pro rata share of the cost of
retaining the attorney.An insured is
not bound by any settlement of its insurer's subrogation claim with respect to
the deductible amount, unless the insured receives, as a result of the
subrogation settlement, the full amount of the deductible.Recovery by the insurer and receipt by the
insured of less than all of the insured's deductible amount does not affect the
insured's rights to recover any unreimbursed portion of the deductible from
parties liable for the loss;

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(7) requiring as a
condition of payment of a claim that repairs to any damaged vehicle must be
made by a particular contractor or repair shop or that parts, other than window
glass, must be replaced with parts other than original equipment parts or
engaging in any act or practice of intimidation, coercion, threat, incentive,
or inducement for or against an insured to use a particular contractor or
repair shop.Consumer benefits included
within preferred vendor programs must not be considered an incentive or
inducement.At the time a claim is
reported, the insurer must provide the following advisory to the insured or
claimant:

"Minnesota law gives
You have the right to choose a repair shop to fix your vehicle.Your policy will cover the reasonable costs
of repairing your vehicle to its pre-accident condition no matter where you
have repairs made.Have you selected a
repair shop or would you like a referral?"

After an insured has
indicated that the insured has selected a repair shop, the insurer must cease
all efforts to influence the insured's or claimant's choice of repair shop;

(8) where liability is
reasonably clear, failing to inform the claimant in an automobile property
damage liability claim that the claimant may have a claim for loss of use of
the vehicle;

(9) failing to make a good
faith assignment of comparative negligence percentages in ascertaining the
issue of liability;

(10) failing to pay any
interest required by statute on overdue payment for an automobile personal
injury protection claim;

(11) if an automobile insurance
policy contains either or both of the time limitation provisions as permitted
by section 65B.55, subdivisions 1 and 2, failing to notify the insured in
writing of those limitations at least 60 days prior to the expiration of that
time limitation;

(12) if an insurer chooses
to have an insured examined as permitted by section 65B.56, subdivision 1,
failing to notify the insured of all of the insured's rights and obligations
under that statute, including the right to request, in writing, and to receive
a copy of the report of the examination;

(13) failing to provide, to
an insured who has submitted a claim for benefits described in section 65B.44,
a complete copy of the insurer's claim file on the insured, excluding internal
company memoranda, all materials that relate to any insurance fraud
investigation, materials that constitute attorney work-product or that qualify
for the attorney-client privilege, and medical reviews that are subject to
section 145.64, within ten business days of receiving a written request from
the insured.The insurer may charge the
insured a reasonable copying fee.This
clause supersedes any inconsistent provisions of sections 72A.49 to 72A.505;

(14) if an automobile policy
provides for the adjustment or settlement of an automobile loss due to damaged
window glass, failing to provide payment to the insured's chosen vendor based
on a competitive price that is fair and reasonable within the local industry at
large.

Where facts establish that a
different rate in a specific geographic area actually served by the vendor is
required by that market, that geographic area must be considered.This clause does not prohibit an insurer
from recommending a vendor to the insured or from agreeing with a vendor to
perform work at an agreed-upon price, provided, however, that before
recommending a vendor, the insurer shall offer its insured the opportunity to
choose the vendor.If the insurer
recommends a vendor, the insurer must also provide the following advisory:

"Minnesota law gives
you the right to go to any glass vendor you choose, and prohibits me from
pressuring you to choose a particular vendor.";

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(15) requiring that
the repair or replacement of motor vehicle glass and related products and
services be made in a particular place or shop or by a particular entity, or by
otherwise limiting the ability of the insured to select the place, shop, or
entity to repair or replace the motor vehicle glass and related products and
services; or

(16) engaging in any act or
practice of intimidation, coercion, threat, incentive, or inducement for or
against an insured to use a particular company or location to provide the motor
vehicle glass repair or replacement services or products.For purposes of this section, a warranty
shall not be considered an inducement or incentive.

Subdivision 1.Readability
compliance; filing and approval.No
insurer shall make, issue, amend, or renew any policy or contract after the
dates specified in section 72C.11 for the applicable type of policy unless the
contract is in compliance with the requirements of sections 72C.06 to 72C.09
and unless the contract is filed with the commissioner for approval.The contract shall be deemed approved 9060 days after filing unless
disapproved by the commissioner within the 90-day 60-day
period.When an insurer, service
plan corporation, or the Minnesota Comprehensive Health Association fails to
respond to an objection or inquiry within 60 days, the filing is automatically
disapproved.A resubmission is required
if action by the Department of Commerce is subsequently requested.An additional filing fee is required for the
resubmission.The commissioner
shall not unreasonably withhold approval.Any disapproval shall be delivered to the insurer in writing, stating
the grounds therefor.Any policy filed
with the commissioner shall be accompanied by a Flesch scale readability
analysis and test score and by the insurer's certification that the policy or
contract is in its judgment readable based on the factors specified in sections
72C.06 to 72C.08.

Subdivision 1.General
duties of commissioner.(a)(1) The
commissioner shall have all the usual powers and authorities necessary for the
discharge of the commissioner's duties under this section and may contract with
individuals in discharge of those duties.The commissioner shall audit the reserves established (a) for individual
cases arising under policies and contracts of coverage issued under subdivision
4 and (b) for the total book of business issued under subdivision 4.If the commissioner determines on the basis
of an audit that there is an excess surplus in the assigned risk plan, the
commissioner must notify the commissioner of finance who shall transfer assets
of the plan equal to the excess surplus to the budget reserve account in the
general fund.

(2) The commissioner shall
monitor the operations of section 79.252 and this section and shall
periodically make recommendations to the governor and legislature when
appropriate, for improvement in the operation of those sections.

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(3) All insurers
and self-insurance administrators issuing policies or contracts under
subdivision 4 shall pay to the commissioner a .25 percent assessment on
premiums for policies and contracts of coverage issued under subdivision 4 for
the purpose of defraying the costs of performing the duties under clauses (1)
and (2).Proceeds of the assessment
shall be deposited in the state treasury and credited to the general fund.

(4) The assigned risk plan
shall not be deemed a state agency.

(5) The commissioner shall
monitor and have jurisdiction over all reserves maintained for assigned risk
plan losses.

(b) As used in this
subdivision, "excess surplus" means the amount of assigned risk plan
assets in excess of the amount needed to pay all current liabilities of the
plan, including, but not limited to:

(1) administrative expenses;

(2) benefit claims; and

(3) if the assigned risk
plan is dissolved under subdivision 8, the amounts that would be due insurers
who have paid assessments to the plan.

Subd. 2a.Minimum qualifications.Any employer that (1) is required to
carry workers' compensation insurance pursuant to chapter 176 and (2) has a current
written notice of refusal to insure pursuant to subdivision 2, is entitled to
coverage upon making written application to the assigned risk plan, and paying
the applicable premium.

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(5) flagrantly
disregards safety or loss control recommendations.Cancellation for nonpayment of premium may be initiated by the
service contractor upon 60 days' written notice to the employer pursuant to
section 176.185, subdivision 1.

Subd. 3b.Occupational disease exposure.An employer having a significant
occupational disease exposure, as determined by the commissioner, to be
entitled to coverage shall have physical examinations made:

(a) of employees who have
not been examined within one year of the date of application for assignment;

(b) of new employees before
hiring; and

(c) of terminated
employees.Upon request, the findings
and reports of doctors making examinations, together with x-rays and other
original exhibits, must be furnished to the assigned risk plan or the
Department of Labor and Industry.

Subd. 2.Minimum
deposit.The minimum deposit is 110
percent of the private self-insurer's estimated future liability.The deposit may be used to secure payment of
all administrative and legal costs, and unpaid assessments required by section
79A.12, subdivision 2, relating to or arising from its or other employers' self-insuring.As used in this section, "private
self-insurer" includes both current and former members of the
self-insurers' security fund; and "private self-insurers' estimated future
liability" means the private self-insurers' total of estimated future
liability as determined by an Associate or Fellow of the Casualty Actuarial
Society every year for group member private self-insurers and, for a nongroup
member private self-insurer's authority to self-insure, every year for the
first five years.After the first five
years, the nongroup member's total shall be as determined by an Associate or
Fellow of the Casualty Actuarial Society at least every two years, and each
such actuarial study shall include a projection of future losses during the
period until the next scheduled actuarial study, less payments anticipated to
be made during that time.

All data and information
furnished by a private self-insurer to an Associate or Fellow of the Casualty
Actuarial Society for purposes of determining private self-insurers' estimated
future liability must be certified by an officer of the private self-insurer to
be true and correct with respect to payroll and paid losses, and must be
certified, upon information and belief, to be true and correct with respect to
reserves.The certification must be
made by sworn affidavit.In addition to
any other remedies provided by law, the certification of false data or
information pursuant to this subdivision may result in a fine imposed by the
commissioner of commerce on the private self-insurer up to the amount of $5,000,
and termination of the private self-insurers' authority to self-insure.The determination of private self-insurers'
estimated future liability by an Associate or Fellow of the Casualty Actuarial
Society shall be conducted in accordance with standards and principles for
establishing loss and loss adjustment expense reserves by the Actuarial
Standards Board, an affiliate of the American Academy of Actuaries.The commissioner may reject an actuarial
report that does not meet the standards and principles of the Actuarial
Standards Board, and may further disqualify the actuary who prepared the report
from submitting any future actuarial reports pursuant to this chapter.Within 30 days after the actuary has been
served by the commissioner with a notice of disqualification, an actuary who is
aggrieved by the disqualification may request a hearing to be conducted in
accordance with chapter 14.Based on a
review of the actuarial report, the commissioner of commerce may require an
increase in the minimum security deposit in an amount the commissioner
considers sufficient.

In addition, the Minnesota
self-insurers' security fund may, at its sole discretion and cost, undertake an
independent actuarial review or an actuarial study of a private self-insurers'
estimated future liability as defined herein.The review or study must be conducted by an associate or fellow of the
Casualty Actuarial Society.The

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actuary has the
right to receive and review data and information of the self-insurer necessary
for the actuary to complete its review or study.A copy of this report must be filed with the commissioner and a
copy must be furnished to the self-insurer.

Estimated future liability is
determined by first taking the total amount of the self-insured's future
liability of workers' compensation claims and then deducting the total amount
which is estimated to be returned to the self-insurer from any specific excess
insurance coverage, aggregate excess insurance coverage, and any supplementary
benefits or second injury benefits which are estimated to be reimbursed by the
special compensation fund.However, in
the determination of estimated future liability, the actuary for the
self-insurer shall not take a credit for any excess insurance or reinsurance
which is provided by a captive insurance company which is wholly owned by the
self-insurer.Supplementary benefits or
second injury benefits will not be reimbursed by the special compensation fund
unless the special compensation fund assessment pursuant to section 176.129 is
paid and the reports required thereunder are filed with the special
compensation fund.In the case of
surety bonds, bonds shall secure administrative and legal costs in addition to
the liability for payment of compensation reflected on the face of the
bond.In no event shall the security be
less than the last retention limit selected by the self-insurer with the
Workers' Compensation Reinsurance Association, provided that the commissioner
may allow former members to post less than the Workers' Compensation
Reinsurance Association retention level if that amount is adequate to secure
payment of the self-insurers' estimated future liability, as defined in this
subdivision, including payment of claims, administrative and legal costs, and
unpaid assessments required by section 79A.12, subdivision 2.The posting or depositing of security
pursuant to this section shall release all previously posted or deposited
security from any obligations under the posting or depositing and any surety
bond so released shall be returned to the surety.Any other security shall be returned to the depositor or the
person posting the bond.

As a condition for the
granting or renewing of a certificate to self-insure, the commissioner may
require a private self-insurer to furnish any additional security the
commissioner considers sufficient to insure payment of all claims under chapter
176.

Subd. 3.Operational
audit.(a) The commissioner,
prior to authorizing surplus distribution of a commercial self-insurance
group's first fund year or no later than after the third anniversary of the
group's authority to self-insure, may conduct an operational audit of the
commercial self-insurance group's claim handling and reserve practices as well
as its underwriting procedures to determine if they adhere to the group's
business plan and sound business practices.The commissioner may select outside consultants to assist in
conducting the audit.After completion
of the audit, the commissioner shall either renew or revoke the commercial
self-insurance group's authority to self-insure.The commissioner may also order any changes deemed necessary in
the claims handling, reserving practices, or underwriting procedures of the
group.

(b) The cost of the
operational audit shall be borne by the commercial self-insurance group.

(1) maintain membership in
and report loss experience data to the Minnesota Workers' Compensation Insurers
Association, or a licensed data service organization, in accordance with the
statistical plan and rules of the organization as approved by the commissioner;

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(2) establish a
plan for merit rating which shall be consistently applied to all insureds,
provided that members of a data service organization may use merit rating plans
developed by that data service organization;

(3) provide an annual report
to the commissioner containing the information and prepared in the form
required by the commissioner; and

(4) keep a record of the
losses paid by the self-insurers and premiums for the group self-insurers.

Subd. 2.Permitted
activity.In addition to any
other activities not prohibited by this chapter, self-insurers may
Through data service organizations licensed under chapter 79, self-insurers may:

(1) through licensed data
service organizations, individually, or with self-insurers commonly owned,
managed, or controlled, conduct research and collect statistics to investigate,
identify, and classify information relating to causes or prevention of losses;
and

(2) develop and use
classification plans and rates based upon any reasonable factors; and at
the request of a private self-insurer or self-insurer group, submit and collect
data, including payroll and loss data; and perform calculations, including
calculations of experience modifications of individual self-insured employers.

(3) develop rules for the
assignment of risks to classifications.

Subd. 3.Delayed reporting.Private self-insurers established under
sections 79A.01 to 79A.18 prior to August 1, 1995, need not begin filing the
reports required under subdivision 1 until January 1, 1998.

Subdivision
1.Required
coverage.A health plan,
including a plan providing the coverage specified in section 62A.011,
subdivision 3, clause (10), must provide coverage for: (1) all physician
prescribed medically appropriate and necessary equipment and supplies used in
the management and treatment of diabetes; and (2) diabetes outpatient
self-management training and education, including medical nutrition therapy,
that is provided by a certified, registered, or licensed health care
professional working in a program consistent with the national standards of
diabetes self-management education as established by the American Diabetes
Association.Coverage must include
persons with gestational, type I or type II diabetes.Coverage required under this section is subject to the same
deductible or coinsurance provisions applicable to the plan's hospital, medical
expense, medical equipment, or prescription drug benefits.A health carrier may not reduce or eliminate
coverage due to this requirement.

Subd.
2.Medicare
Part D exception.A health
plan providing the coverage specified in section 62A.011, subdivision 3, clause
(10), is not subject to the requirements of subdivision 1, clause (1), with
respect to equipment and supplies covered under the Medicare Part D
Prescription Drug program, whether or not the covered person is enrolled in a
Medicare Part D plan.

This
subdivision does not apply to a health plan providing the coverage specified in
section 62A.011, subdivision 3, clause (10), that was in effect on December 31,
2005, if the covered person remains enrolled in the plan and does not enroll in
a Medicare Part D plan.

EFFECTIVE DATE.This section is effective retroactive to January 1, 2006.

(a)
The basic Medicare supplement plan must have a level of coverage that will
provide:

(1)
coverage for all of the Medicare Part A inpatient hospital coinsurance amounts,
and 100 percent of all Medicare part A eligible expenses for hospitalization
not covered by Medicare, after satisfying the Medicare Part A deductible;

(2)
coverage for the daily co-payment amount of Medicare Part A eligible expenses
for the calendar year incurred for skilled nursing facility care;

(3)
coverage for the coinsurance amount, or in the case of outpatient department
services paid under a prospective payment system, the co-payment amount, of
Medicare eligible expenses under Medicare Part B regardless of hospital
confinement, subject to the Medicare Part B deductible amount;

(4) 80
percent of the hospital and medical expenses and supplies incurred during
travel outside the United States as a result of a medical emergency;

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(5) coverage for
the reasonable cost of the first three pints of blood, or equivalent quantities
of packed red blood cells as defined under federal regulations under Medicare
Parts A and B, unless replaced in accordance with federal regulations;

(6) 100 percent of the cost
of immunizations not otherwise covered under Part D of the Medicare program and
routine screening procedures for cancer screening including mammograms and pap
smears; and

(7) 80 percent of coverage
for all physician prescribed medically appropriate and necessary equipment and
supplies used in the management and treatment of diabetes not otherwise covered
under Part D of the Medicare program.Coverage must include persons with gestational, type I, or type II
diabetes.Coverage under this clause
is subject to section 62A.3093, subdivision 2.

(b) Only the following
optional benefit riders may be added to this plan:

(1) coverage for all of the
Medicare Part A inpatient hospital deductible amount;

(2) a minimum of 80 percent
of eligible medical expenses and supplies not covered by Medicare Part B, not
to exceed any charge limitation established by the Medicare program or state
law;

(3) coverage for all of the
Medicare Part B annual deductible;

(4) coverage for at least 50
percent, or the equivalent of 50 percent, of usual and customary prescription
drug expenses.An outpatient
prescription drug benefit must not be included for sale or issuance in a
Medicare policy or certificate issued on or after January 1, 2006;

(5) preventive medical care
benefit coverage for the following preventative health services not covered by
Medicare:

(i) an annual clinical
preventive medical history and physical examination that may include tests and
services from clause (ii) and patient education to address preventive health
care measures;

(ii) preventive screening
tests or preventive services, the selection and frequency of which is
determined to be medically appropriate by the attending physician.

Reimbursement shall be for
the actual charges up to 100 percent of the Medicare-approved amount for each
service, as if Medicare were to cover the service as identified in American
Medical Association current procedural terminology (AMA CPT) codes, to a
maximum of $120 annually under this benefit.This benefit shall not include payment for a procedure covered by
Medicare;

(6) coverage for services to
provide short-term at-home assistance with activities of daily living for those
recovering from an illness, injury, or surgery:

(i) For purposes of this
benefit, the following definitions apply:

(A) "activities of
daily living" include, but are not limited to, bathing, dressing, personal
hygiene, transferring, eating, ambulating, assistance with drugs that are
normally self-administered, and changing bandages or other dressings;

(B) "care
provider" means a duly qualified or licensed home health aide/homemaker,
personal care aid, or nurse provided through a licensed home health care agency
or referred by a licensed referral agency or licensed nurses registry;

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(C)
"home" means a place used by the insured as a place of residence,
provided that the place would qualify as a residence for home health care
services covered by Medicare.A
hospital or skilled nursing facility shall not be considered the insured's
place of residence;

(D)
"at-home recovery visit" means the period of a visit required to
provide at-home recovery care, without limit on the duration of the visit,
except each consecutive four hours in a 24-hour period of services provided by
a care provider is one visit;

(ii)
Coverage requirements and limitations:

(A)
at-home recovery services provided must be primarily services that assist in
activities of daily living;

(B)
the insured's attending physician must certify that the specific type and
frequency of at-home recovery services are necessary because of a condition for
which a home care plan of treatment was approved by Medicare;

(C)
coverage is limited to:

(I) no
more than the number and type of at-home recovery visits certified as necessary
by the insured's attending physician.The total number of at-home recovery visits shall not exceed the number
of Medicare-approved home care visits under a Medicare-approved home care plan
of treatment;

(II)
the actual charges for each visit up to a maximum reimbursement of $40 per
visit;

(III)
$1,600 per calendar year;

(IV)
seven visits in any one week;

(V)
care furnished on a visiting basis in the insured's home;

(VI)
services provided by a care provider as defined in this section;

(VII)
at-home recovery visits while the insured is covered under the policy or
certificate and not otherwise excluded;

(VIII)
at-home recovery visits received during the period the insured is receiving
Medicare-approved home care services or no more than eight weeks after the
service date of the last Medicare-approved home health care visit;

(iii)
Coverage is excluded for:

(A)
home care visits paid for by Medicare or other government programs; and

(B)
care provided by family members, unpaid volunteers, or providers who are not
care providers;

(7)
coverage for at least 50 percent, or the equivalent of 50 percent, of usual and
customary prescription drug expenses to a maximum of $1,200 paid by the issuer
annually under this benefit.An issuer
of Medicare supplement insurance policies that elects to offer this benefit
rider shall also make available coverage that contains the rider specified in
clause (4).An outpatient prescription
drug benefit must not be included for sale or issuance in a Medicare policy or
certificate issued on or after January 1, 2006.

EFFECTIVE DATE.This section is effective retroactive to January 1, 2006."

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Page 26, line 11,
delete "self-insurers'" and insert "self-insurer's"

Renumber
the sections in sequence and correct the internal references

Amend
the title accordingly

The motion prevailed and the amendment was adopted.

Wilkin
and Huntley moved to amend S. F. No. 3480, as amended, as follows:

Subd.
3a.Individual
policy rates file and use; minimum lifetime loss ratio guarantee.(a) Notwithstanding subdivisions 2, 3,
4a, 5a, and 6, individual premium rates may be used upon filing with the
department of an individual policy form if the filing is accompanied by the
individual policy form filing and a minimum lifetime loss ratio guarantee.Insurers may use the filing procedure
specified in this subdivision only if the affected individual policy forms
disclose the benefit of a minimum lifetime loss ratio guarantee.Insurers may amend individual policy forms
to provide for a minimum lifetime loss ratio guarantee.If an insurer elects to use the filing
procedure in this subdivision for an individual policy rate, the insurer shall
not use a filing of premium rates that does not provide a minimum lifetime loss
ratio guarantee for that individual policy rate.

(b)
The minimum lifetime loss ratio guarantee must be in writing and must contain
at least the following:

(1)
an actuarial memorandum specifying the expected loss ratio that complies with
the standards as set forth in this subdivision;

(2)
a statement certifying that all rates, fees, dues, and other charges are not
excessive, inadequate, or unfairly discriminatory;

(3)
detailed experience information concerning the policy forms;

(4)
a step-by-step description of the process used to develop the minimum lifetime
loss ratio, including demonstration with supporting data;

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(5) guarantee of
specific minimum lifetime loss ratio that must be greater than or equal to the
minimum loss ratio that applies to the health carrier under section 62A.021,
subdivision 1, paragraph (a), (f), or (g), for policies issued to individuals
or for certificates issued to members of an association that does not offer
coverage to small employers, taking into consideration adjustments for
duration;

(6)
a guarantee that the actual Minnesota loss ratio for the calendar year in which
the new rates take effect, and for each year thereafter until new rates are
filed, will meet or exceed the minimum lifetime loss ratio standards referred
to in clause (5), adjusted for duration;

(7)
a guarantee that the actual Minnesota lifetime loss ratio shall meet or exceed
the minimum lifetime loss ratio standards referred to in clause (5); and

(8)
if the annual earned premium volume in Minnesota under the particular policy form
is less than $2,500,000, the minimum lifetime loss ratio guarantee must be
based partially on the Minnesota earned premium and other credible factors as
specified by the commissioner.

(c)
The actual Minnesota minimum loss ratio results for each year at issue must be
independently audited at the insurer's expense, and the audit report must be
filed with the commissioner not later than 120 days after the end of the year
at issue.

(d)
The insurer shall refund premiums in the amount necessary to bring the actual
loss ratio up to the guaranteed minimum lifetime loss ratio.For the purpose of this paragraph, loss
ratio and guaranteed minimum lifetime loss ratio are the expected aggregate
loss ratio of all approved individual policy forms that provide for a minimum
lifetime loss ratio guarantee.

(e)
A Minnesota policyholder affected by the guaranteed minimum lifetime loss ratio
shall receive a portion of the premium refund relative to the premium paid by
the policyholder.The refund must be
made to all Minnesota policyholders insured under the applicable policy form
during the year at issue if the refund would equal $10 or more per policy.The refund must include statutory interest
from July 1 of the year at issue until the date of payment.Payment must be made not later than 180 days
after the end of the year at issue.

(f)
Premium refunds of less than $10 per insured must be credited to the
policyholder's account.

(g)
Subdivisions 2 and 3 do not apply if premium rates are filed with the
department and accompanied by a minimum lifetime loss ratio guarantee that
meets the requirements of this subdivision.Such filings are deemed approved.When determining a loss ratio for the purposes of a minimum lifetime
loss ratio guarantee, the insurer shall divide the total of the claims
incurred, plus preferred provider organization expenses, case management, and
utilization review expenses, plus reinsurance premiums less reinsurance
recoveries by the premiums earned less state and local taxes less other assessments.The insurer shall identify any assessment
allocated.

(h)
The policy form filing of an insurer using the filing procedure with a minimum
lifetime loss ratio guarantee must disclose to the enrollee, member, or
subscriber an explanation of the minimum lifetime loss ratio guarantee, and the
actual loss ratio, and any adjustments for duration.

(i)
The insurer who elects to use the filing procedure with a minimum lifetime loss
ratio guarantee shall notify all policyholders of the refund calculation, the
result of the refund calculation, the percentage of premium on an aggregate
basis to be refunded, if any, any amount of the refund attributed to the
payment of interests, and an explanation of amounts less than $10.

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Subdivision
1.Loss
ratio standards.(a)
Notwithstanding section 62A.02, subdivision 3, relating to loss ratios, and
except as otherwise authorized by section 62A.02, subdivision 3a, for
individual policies or certificates, health care policies or certificates
shall not be delivered or issued for delivery to an individual or to a small
employer as defined in section 62L.02, unless the policies or certificates can
be expected, as estimated for the entire period for which rates are computed to
provide coverage, to return to Minnesota policyholders and certificate holders
in the form of aggregate benefits not including anticipated refunds or credits,
provided under the policies or certificates, (1) at least 75 percent of the
aggregate amount of premiums earned in the case of policies issued in the small
employer market, as defined in section 62L.02, subdivision 27, calculated on an
aggregate basis; and (2) at least 65 percent of the aggregate amount of
premiums earned in the case of each policy form or certificate form issued in
the individual market; calculated on the basis of incurred claims experience or
incurred health care expenses where coverage is provided by a health
maintenance organization on a service rather than reimbursement basis and
earned premiums for the period and according to accepted actuarial principles
and practices.Assessments by the
reinsurance association created in chapter 62L and all types of taxes,
surcharges, or assessments created by Laws 1992, chapter 549, or created on or
after April 23, 1992, are included in the calculation of incurred claims
experience or incurred health care expenses.The applicable percentage for policies and certificates issued in the
small employer market, as defined in section 62L.02, increases by one
percentage point on July 1 of each year, beginning on July 1, 1994, until an 82
percent loss ratio is reached on July 1, 2000.The applicable percentage for policy forms and certificate forms issued
in the individual market increases by one percentage point on July 1 of each
year, beginning on July 1, 1994, until a 72 percent loss ratio is reached on
July 1, 2000.A health carrier that
enters a market after July 1, 1993, does not start at the beginning of the
phase-in schedule and must instead comply with the loss ratio requirements
applicable to other health carriers in that market for each time period.Premiums earned and claims incurred in
markets other than the small employer and individual markets are not relevant
for purposes of this section.

(b)
All filings of rates and rating schedules shall demonstrate that actual
expected claims in relation to premiums comply with the requirements of this
section when combined with actual experience to date.Filings of rate revisions shall also demonstrate that the
anticipated loss ratio over the entire future period for which the revised
rates are computed to provide coverage can be expected to meet the appropriate
loss ratio standards, and aggregate loss ratio from inception of the policy
form or certificate form shall equal or exceed the appropriate loss ratio
standards.

(c) A
health carrier that issues health care policies and certificates to individuals
or to small employers, as defined in section 62L.02, in this state shall file
annually its rates, rating schedule, and supporting documentation including
ratios of incurred losses to earned premiums by policy form or certificate form
duration for approval by the commissioner according to the filing requirements
and procedures prescribed by the commissioner.The supporting documentation shall also demonstrate in accordance with
actuarial standards of practice using reasonable assumptions that the
appropriate loss ratio standards can be expected to be met over the entire
period for which rates are computed.The demonstration shall exclude active life reserves.If the data submitted does not confirm that
the health carrier has satisfied the loss ratio requirements of this section,
the commissioner shall notify the health carrier in writing of the
deficiency.The health carrier shall
have 30 days from the date of the commissioner's notice to file amended rates
that comply with this section.If the
health carrier fails to file amended rates within the prescribed time, the
commissioner shall order that the health carrier's filed rates for the
nonconforming policy form or certificate form be reduced to an amount that
would have resulted in a loss ratio that complied with this section had it been
in effect for the reporting period of the supplement.The health carrier's failure to file amended rates within the
specified time or the issuance of the commissioner's order amending the rates does
not preclude the health carrier from filing an amendment of its rates at a
later time.The commissioner shall
annually make the submitted data available to the public at a cost not to
exceed the cost of copying.The data
must be compiled in a form useful for consumers who wish to compare premium
charges and loss ratios.

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(d) Each sale of a
policy or certificate that does not comply with the loss ratio requirements of
this section is an unfair or deceptive act or practice in the business of
insurance and is subject to the penalties in sections 72A.17 to 72A.32.

(e)(1)
For purposes of this section, health care policies issued as a result of
solicitations of individuals through the mail or mass media advertising,
including both print and broadcast advertising, shall be treated as individual
policies.

(2)
For purposes of this section, (i) "health care policy" or
"health care certificate" is a health plan as defined in section
62A.011; and (ii) "health carrier" has the meaning given in section
62A.011 and includes all health carriers delivering or issuing for delivery
health care policies or certificates in this state or offering these policies
or certificates to residents of this state.

(f)
The loss ratio phase-in as described in paragraph (a) does not apply to
individual policies and small employer policies issued by a health plan company
that is assessed less than three percent of the total annual amount assessed by
the Minnesota Comprehensive Health Association.These policies must meet a 68 percent loss ratio for individual
policies, a 71 percent loss ratio for small employer policies with fewer than
ten employees, and a 75 percent loss ratio for all other small employer
policies.

(g)
Notwithstanding paragraphs (a) and (f), the loss ratio shall be 60 percent for
a health plan as defined in section 62A.011, offered by an insurance company
licensed under chapter 60A that is assessed less than ten percent of the total
annual amount assessed by the Minnesota Comprehensive Health Association.For purposes of the percentage calculation
of the association's assessments, an insurance company's assessments include
those of its affiliates.

(h)
The commissioners of commerce and health shall each annually issue a public
report listing, by health plan company, the actual loss ratios experienced in
the individual and small employer markets in this state by the health plan
companies that the commissioners respectively regulate.The commissioners shall coordinate release
of these reports so as to release them as a joint report or as separate reports
issued the same day.The report or
reports shall be released no later than June 1 for loss ratios experienced for
the preceding calendar year.Health
plan companies shall provide to the commissioners any information requested by
the commissioners for purposes of this paragraph.

Subd.
3.Premium
rate restrictions.No individual
health plan may be offered, sold, issued, or renewed to a Minnesota resident
unless the premium rate charged is determined in accordance with the following
requirements:

(a)
Premium rates must be no more than 25 percent above and no more than 25 percent
below the index rate charged to individuals for the same or similar coverage,
adjusted pro rata for rating periods of less than one year.The premium variations permitted by this
paragraph must be based only upon health status, claims experience, and
occupation.For purposes of this
paragraph, health status includes refraining from tobacco use or other
actuarially valid lifestyle factors associated with good health, provided that
the lifestyle factor and its effect upon premium rates have been determined by
the commissioner to be actuarially valid and have been approved by the
commissioner.Variations permitted
under this paragraph must not be based upon age or applied differently at different
ages.This paragraph does not prohibit
use of a constant percentage adjustment for factors permitted to be used under
this paragraph.

(b)
Premium rates may vary based upon the ages of covered persons only as provided
in this paragraph.In addition to the
variation permitted under paragraph (a), each health carrier may use an
additional premium variation based upon age of up to plus or minus 50 percent
of the index rate.

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(c) A health
carrier may request approval by the commissioner to establish no more than
three separate geographic regions determined by the health
carrier and to establish separate index rates for each such region,
provided that the index rates do not vary between any two regions by more than
20 percent.Health carriers that do not
do business in the Minneapolis/St.Paul
metropolitan area may request approval for no more than two geographic regions,
and clauses (2) and (3) do not apply to approval of requests made by those
health carriers.The commissioner may
shall grant approval if the following conditions are met:

(1)
the geographic regions must be applied uniformly by the health carrier;

(2)
one geographic region must be based on the Minneapolis/St.Paul metropolitan area;

(3)
for each geographic region that is rural, the index rate for that region must
not exceed the index rate for the Minneapolis/St.Paul metropolitan area; and

(2)
each geographic region must be composed of no fewer than seven counties that
create a contiguous region; and

(4) (3) the health carrier provides
actuarial justification acceptable to the commissioner for the proposed
geographic variations in index rates, establishing that the variations are
based upon differences in the cost to the health carrier of providing coverage.

(d)
Health carriers may use rate cells and must file with the commissioner the rate
cells they use.Rate cells must be
based upon the number of adults or children covered under the policy and may
reflect the availability of Medicare coverage.The rates for different rate cells must not in any way reflect
generalized differences in expected costs between principal insureds and their
spouses.

(e) In
developing its index rates and premiums for a health plan, a health carrier
shall take into account only the following factors:

(2)
actuarially valid geographic variations if approved by the commissioner as
provided in paragraph (c).

(f)
All premium variations must be justified in initial rate filings and upon
request of the commissioner in rate revision filings.All rate variations are subject to approval by the commissioner.

(g)
The loss ratio must comply with the section 62A.021 requirements for individual
health plans.

(h)
The rates must not be approved, unless the commissioner has determined that the
rates are reasonable.In determining
reasonableness, the commissioner shall consider the growth rates applied under
section 62J.04, subdivision 1, paragraph (b), to the calendar year or years
that the proposed premium rate would be in effect, actuarially valid changes in
risks associated with the enrollee populations, and actuarially valid changes
as a result of statutory changes in Laws 1992, chapter 549.

(i)
An insurer may, as part of a minimum lifetime loss ratio guarantee filing under
section 62A.02, subdivision 3a, include a rating practices guarantee as
provided in this paragraph.The rating
practices guarantee must be in writing and must guarantee that the policy form
will be offered, sold, issued, and renewed only with premium rates and premium
rating practices that comply with subdivisions 2, 3, 4, and 5.The rating practices guarantee must be
accompanied by an actuarial memorandum that demonstrates that the premium rates
and premium rating system

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used in
connection with the policy form will satisfy the guarantee.The guarantee must guarantee refunds of any
excess premiums to policyholders charged premiums that exceed those permitted
under subdivision 2, 3, 4, or 5.An
insurer that complies with this paragraph in connection with a policy form is
exempt from the requirement of prior approval by the commissioner under
paragraphs (c), (f), and (h).

EFFECTIVE DATE.The amendments to paragraph (c) of this section are effective
January 1, 2007, and apply to policies issued or renewed on or after that date.

Sec.
4.[62Q.80]
COMMUNITY-BASED HEALTH CARE COVERAGE PROGRAM.

Subdivision
1.Scope.(a) A community-based health care
initiative may develop and operate a community-based health care coverage
program that offers to eligible individuals and their dependents the option of
purchasing through their employer health care coverage on a fixed prepaid basis
without meeting the requirements of chapter 60A, 62A, 62C, 62D, 62Q, or 62T, or
any other law or rule that applies to entities licensed under these chapters.

(b)
The initiative shall establish health outcomes to be achieved through the
program and performance measurements in order to determine whether these
outcomes have been met.The outcomes
must include, but are not limited to:

(1)
a reduction in uncompensated care provided by providers participating in the
community-based health network;

(2)
an increase in the delivery of preventive health care services; and

(3)
health improvement for enrollees with chronic health conditions through the
management of these conditions.

In establishing performance
measurements, the initiative shall use measures that are consistent with
measures published by nonprofit Minnesota or national organizations that
produce and disseminate health care quality measures.

(c)
Any program established under this section shall not constitute a financial
liability for the state, in that any financial risk involved in the operation
or termination of the program shall be borne by the community-based initiative
and the participating health care providers.

Subd.
2.Definitions.For purposes of this section, the
following definitions apply:

(a)
"Community-based" means located in or primarily relating to the
community of geographically contiguous political subdivisions, as determined by
the board of a community-based health initiative that is served by the
community-based health care coverage program.

(b)
"Community-based health care coverage program" or "program"
means a program administered by a community-based health initiative that
provides health care services through provider members of a community-based
health network or combination of networks to eligible individuals and their
dependents who are enrolled in the program.

(c)
"Community-based health initiative" means a nonprofit corporation
that is governed by a board that has at least 80 percent of its members
residing in the community and includes representatives of the participating
network providers and employers.

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(d)
"Community-based health network" means a contract-based network of
health care providers organized by the community-based health initiative to
provide or support the delivery of health care services to enrollees of the
community-based health care coverage program on a risk-sharing or
nonrisk-sharing basis.

(e)
"Dependent" means an eligible employee's spouse or unmarried child
who is under the age of 19 years.

Subd.
3.Approval.(a) Prior to the operation of a
community-based health care coverage program, a community-based health
initiative shall submit to the commissioner of health for approval the
community-based health care coverage program developed by the initiative.The commissioner shall only approve a
program that has been awarded a community access program grant from the United
States Department of Health and Human Services.The commissioner shall ensure that the program meets the federal
grant requirements and any requirements described in this section and is
actuarially sound based on a review of appropriate records and methods utilized
by the community-based health initiative in establishing premium rates for the
community-based health care coverage program.

(b)
Prior to approval, the commissioner shall also ensure that:

(1)
the benefits offered comply with subdivision 8 and that there are adequate
numbers of health care providers participating in the community-based health
network to deliver the benefits offered under the program;

(2)
the activities of the program are limited to activities that are exempt under
this section or otherwise from regulation by the commissioner of commerce;

(3)
the complaint resolution process meets the requirements of subdivision 10; and

(4)
the data privacy policies and procedures comply with state and federal law.

Subd.
4.Establishment.(a) The initiative shall establish and
operate upon approval by the commissioner of health a community-based health
care coverage program.The operational
structure established by the initiative shall include, but is not limited to:

(1)
establishing a process for enrolling eligible individuals and their dependents;

(2)
collecting and coordinating premiums from enrollees and employers of enrollees;

(3)
providing payment to participating providers;

(4)
establishing a benefit set according to subdivision 8 and establishing premium
rates and cost-sharing requirements;

(1) employ at least one but
no more than 50 employees at the time of initial enrollment in the program;

(2) pay its employees a
median wage of $12.50 per hour or less; and

(3) not have offered employer-subsidized
health coverage to its employees for at least 12 months prior to the initial
enrollment in the program.For purposes
of this section, "employer-subsidized health coverage" means health
care coverage for which the employer pays at least 50 percent of the cost of
coverage for the employee.

(b) To participate in the
program, a qualifying employer agrees to:

(1) offer health care
coverage through the program to all eligible employees and their dependents
regardless of health status;

(2) participate in the
program for an initial term of at least one year;

(3) pay a percentage of the
premium established by the initiative for the employee; and

(4) provide the initiative
with any employee information deemed necessary by the initiative to determine
eligibility and premium payments.

Subd. 7.Participating
providers.Any health care
provider participating in the community-based health network must accept as
payment in full the payment rate established by the initiative and may not charge
to or collect from an enrollee any amount in access of this amount for any
service covered under the program.

(1) child health supervision
services up to age 18, as defined under section 62A.047; and

(2) preventive services,
including:

(i) health education and
wellness services;

(ii) health supervision,
evaluation, and follow-up;

(iii) immunizations; and

(iv) early disease
detection.

(b) Coverage of health care
services offered by the program may be limited to participating health care
providers or health networks.All
services covered under the program must be services that are offered within the
scope of practice of the participating health care providers.

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(c) The
initiative may establish cost-sharing requirements.Any co-payment or deductible provisions established may not
discriminate on the basis of age, sex, race, disability, economic status, or
length of enrollment in the program.

(d)
If the initiative amends or alters the benefits offered through the program
from the initial offering, the initiative must notify the commissioner of
health and all enrollees of the benefit change.

Subd.
9.Enrollee
information.(a) The
initiative must provide an individual or family who enrolls in the program a
clear and concise written statement that includes the following information:

(1)
health care services that are provided under the program;

(2)
any exclusions or limitations on the health care services offered, including
any cost-sharing arrangements or prior authorization requirements;

(3)
a list of where the health care services can be obtained and that all health
care services must be provided by or through a participating health care
provider or community-based health network;

(4)
a description of the program's complaint resolution process, including how to
submit a complaint; how to file a complaint with the commissioner of health;
and how to obtain an external review of any adverse decisions as provided under
subdivision 10;

(5)
the conditions under which the program or coverage under the program may be
canceled or terminated; and

(6)
a precise statement specifying that this program is not an insurance product
and, as such, is exempt from state regulation of insurance products.

(b)
The commissioner of health must approve a copy of the written statement prior
to the operation of the program.

Subd.
10.Complaint
resolution process.(a) The
initiative must establish a complaint resolution process.The process must make reasonable efforts to
resolve complaints and to inform complainants in writing of the initiative's
decision within 60 days of receiving the complaint.Any decision that is adverse to the enrollee shall include a
description of the right to an external review as provided in paragraph (c) and
how to exercise this right.

(b)
The initiative must report any complaint that is not resolved within 60 days to
the commissioner of health.

(c)
The initiative must include in the complaint resolution process the ability of
an enrollee to pursue the external review process provided under section 62Q.73
with any decision rendered under this external review process binding on the
initiative.

Subd.
11.Data
privacy.The initiative
shall establish data privacy policies and procedures for the program that
comply with state and federal data privacy laws.

Subd.
12.Limitations
on enrollment.(a) The
initiative may limit enrollment in the program.If enrollment is limited, a waiting list must be established.

(b)
The initiative shall not restrict or deny enrollment in the program except for
nonpayment of premiums, fraud or misrepresentation, or as otherwise permitted
under this section.

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(c) The
initiative may require a certain percentage of participation from eligible
employees of a qualifying employer before coverage can be offered through the
program.

Subd. 13.Report.(a) The initiative shall submit quarterly
status reports to the commissioner of health on January 15, April 15, July 15,
and October 15 of each year, with the first report due January 15, 2007.The status report shall include:

(1) the financial status of
the program, including the premium rates, cost per member per month, claims
paid out, premiums received, and administrative expenses;

(2) a description of the
health care benefits offered and the services utilized;

(3) the number of employers
participating, the number of employees and dependents covered under the program,
and the number of health care providers participating;

(4) a description of the
health outcomes to be achieved by the program and a status report on the
performance measurements to be used and collected; and

(5) any other information
requested by the commissioner of health or commerce or the legislature.

(b) The initiative shall
contract with an independent entity to conduct an evaluation of the program to
be submitted to the commissioners of health and commerce and the legislature by
January 15, 2009.The evaluation shall
include:

(1) an analysis of the
health outcomes established by the initiative and the performance measurements
to determine whether the outcomes are being achieved;

(2) an analysis of the
financial status of the program, including the claims to premiums loss ratio
and utilization and cost experience;

(3) the demographics of the
enrollees, including their age, gender, family income, and the number of
dependents;

(4) the number of employers
and employees who have been denied access to the program and the basis for the
denial;

(5) specific analysis on
enrollees who have aggregate medical claims totaling over $5,000 per year,
including data on the enrollee's main diagnosis and whether all the medical
claims were covered by the program;

(6) number of enrollees
referred to state public assistance programs;

(7) a comparison of
employer-subsidized health coverage provided in a comparable geographic area to
the designated community-based geographic area served by the program,
including, to the extent available:

(i) the difference in the
number of employers with 50 or fewer employees offering employer-subsidized
health coverage;

(ii) the difference in
uncompensated care being provided in each area; and

(iii) a comparison of health
care outcomes and measurements established by the initiative; and

(8) any other information
requested by the commissioner of health or commerce.

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Subdivision 1.Required
disclosure of estimated payment.(a)
A health care provider, as defined in section 62J.03, subdivision 8, or
the provider's designee as agreed to by that designee, shall, at the
request of a consumer, provide that consumer with a good faith estimate of the
reimbursement the provider expects to receive from the health plan company in
which the consumer is enrolled.Health
plan companies must allow contracted providers, or their designee, to
release this information.A good faith
estimate must also be made available at the request of a consumer who is not
enrolled in a health plan company.Payment information provided by a provider, or by the provider's
designee as agreed to by that designee, to a patient pursuant to this
subdivision does not constitute a legally binding estimate of the cost of
services.

(b)
A health plan company, as defined in section 62J.03, subdivision 10, shall, at
the request of an enrollee or the enrollee's designee, provide that enrollee
with a good faith estimate of the reimbursement the health plan company would
expect to pay to a specified provider within the network for a health care
service specified by the enrollee.If

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requested by the
enrollee, the health plan company shall also provide to the enrollee a good
faith estimate of the enrollee's out-of-pocket cost for the health care
service.An estimate provided to an
enrollee under this paragraph is not a legally binding estimate of the
reimbursement or out-of-pocket cost.

EFFECTIVE DATE.Paragraph (a) is effective the day following final
enactment.Paragraph (b) is effective
January 1, 2007.

Sec.
7.[62J.823]
HOSPITAL PRICING TRANSPARENCY.

Subdivision
1.Short
title.This section may be
cited as the Hospital Pricing Transparency Act.

Subd.
2.Definition.For the purposes of this section,
"estimate" means the actual price expected to be billed to the
individual or to the individual's health plan company based on the specific
diagnostic related group code or specific procedure code or codes, reflecting
any known discounts the individual would receive.

Subd.
3.Applicability
and scope.Any hospital, as
defined in section 144.696, subdivision 3, and outpatient surgical center, as
defined in section 144.696, subdivision 4, shall provide a written estimate of
the cost of a specific service or stay upon the request of a patient, doctor,
or the patient's representative.The
request must include:

(1)
the health coverage status of the patient, including the specific health plan
or other health coverage under which the patient is enrolled, if any; and

(2)
at least one of the following:

(i)
the specific diagnostic related group code;

(ii)
the name of the procedure or procedures to be performed;

(iii)
the type of treatment to be received; or

(iv)
any other information that will allow the hospital or outpatient surgical
center to determine the specific diagnostic related group or procedure code or
codes.

Subd.
4.Estimate.(a) An estimate provided by the hospital
or outpatient surgical center must contain:

(1)
the method used to calculate the estimate;

(2)
the specific diagnostic related group or procedure code or codes used to
calculate the estimate, and a description of the diagnostic related group or
procedure code or codes that is reasonably understandable to a patient; and

(3)
a statement indicating that the estimate, while accurate, may not reflect the
actual billed charges and that the final bill may be higher or lower depending
on the patient's specific circumstances.

(b)
The estimate may be provided in any method that meets the needs of the patient
and the hospital or outpatient surgical center, including electronically;
however, a paper copy must be provided if specifically requested.

EFFECTIVE DATE.This section is effective October 1, 2006.

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Subd.
3.Minimum
participation and contribution.(a)
A small employer that has at least 75 percent of its eligible employees who
have not waived coverage participating in a health benefit plan and that
contributes at least 50 percent toward the cost of coverage of each eligible
employee must be guaranteed coverage on a guaranteed issue basis from any
health carrier participating in the small employer market.The participation level of eligible
employees must be determined at the initial offering of coverage and at the
renewal date of coverage.A health
carrier must not increase the participation requirements applicable to a small
employer at any time after the small employer has been accepted for
coverage.For the purposes of this
subdivision, waiver of coverage includes only waivers due to: (1) coverage
under another group health plan; (2) coverage under Medicare Parts A and B; (3)
coverage under MCHA permitted under section 62E.141; or (4) coverage under
medical assistance under chapter 256B or general assistance medical care under
chapter 256D.

(b) If
a small employer does not satisfy the contribution or participation
requirements under this subdivision, a health carrier may voluntarily issue or
renew individual health plans, or a health benefit plan which must fully comply
with this chapter.A health carrier
that provides a health benefit plan to a small employer that does not meet the
contribution or participation requirements of this subdivision must maintain
this information in its files for audit by the commissioner.A health carrier may not offer an individual
health plan, purchased through an arrangement between the employer and the
health carrier, to any employee unless the health carrier also offers the
individual health plan, on a guaranteed issue basis, to all other employees of
the same employer.An arrangement
permitted under section 62L.12, subdivision 2, paragraph (k), is not an
arrangement between the employer and the health carrier for purposes of this
paragraph.

(c)
Nothing in this section obligates a health carrier to issue coverage to a small
employer that currently offers coverage through a health benefit plan from
another health carrier, unless the new coverage will replace the existing
coverage and not serve as one of two or more health benefit plans offered by
the employer.This paragraph does not
apply if the small employer will meet the required participation level with
respect to the new coverage.

EFFECTIVE DATE.This section is effective the day following final enactment.

Subd.
4.Geographic
premium variations.A health
carrier may request approval by the commissioner to establish no more than
three separate geographic regions determined by the health
carrier and to establish separate index rates for each such region,
provided that the index rates do not vary between any two regions by more than
20 percent.Health carriers that do not
do business in the Minneapolis/St.Paul
metropolitan area may request approval for no more than two geographic regions,
and clauses (2) and (3) do not apply to approval of requests made by those
health carriers.A health carrier may
also request approval to establish one or more additional geographic regions
and one or more separate index rates for premiums for employees working and
residing outside of Minnesota.The
commissioner may shall grant approval if the following conditions
are met:

(1)
the geographic regions must be applied uniformly by the health carrier;

(2)
one geographic region must be based on the Minneapolis/St.Paul metropolitan area;

(3)
if one geographic region is rural, the index rate for the rural region must not
exceed the index rate for the Minneapolis/St.Paul metropolitan area;

(2)
each geographic region must be composed of no fewer than seven counties that
create a contiguous region; and

Journal of the House - 111th
Day - Saturday, May 20, 2006 - Top of Page 8091

(4) (3) the health carrier provides
actuarial justification acceptable to the commissioner for the proposed
geographic variations in index rates, establishing that the variations are
based upon differences in the cost to the health carrier of providing coverage.

EFFECTIVE DATE.This section is effective January 1, 2007, and applies to
policies issued or renewed on or after that date.

Subd. 2.Exceptions.(a) A health carrier may sell, issue, or
renew individual conversion policies to eligible employees otherwise eligible
for conversion coverage under section 62D.104 as a result of leaving a health
maintenance organization's service area.

(b) A health carrier may
sell, issue, or renew individual conversion policies to eligible employees
otherwise eligible for conversion coverage as a result of the expiration of any
continuation of group coverage required under sections 62A.146, 62A.17, 62A.21,
62C.142, 62D.101, and 62D.105.

(e) A health carrier may sell,
issue, or renew individual health plans if the coverage is appropriate due to
an unexpired preexisting condition limitation or exclusion applicable to the
person under the employer's group health plan or due to the person's need for
health care services not covered under the employer's group health plan.

(f) A health carrier may
sell, issue, or renew an individual health plan, if the individual has elected
to buy the individual health plan not as part of a general plan to substitute
individual health plans for a group health plan nor as a result of any
violation of subdivision 3 or 4.

(g) Nothing in this
subdivision relieves a health carrier of any obligation to provide continuation
or conversion coverage otherwise required under federal or state law.

(h) Nothing in this chapter
restricts the offer, sale, issuance, or renewal of coverage issued as a
supplement to Medicare under sections 62A.31 to 62A.44, or policies or
contracts that supplement Medicare issued by health maintenance organizations,
or those contracts governed by sections 1833, 1851 to 1859, 1860D, or 1876 of
the federal Social Security Act, United States Code, title 42, section 1395 et
seq., as amended.

(i) Nothing in this chapter
restricts the offer, sale, issuance, or renewal of individual health plans
necessary to comply with a court order.

(j) A health carrier may
offer, issue, sell, or renew an individual health plan to persons eligible for
an employer group health plan, if the individual health plan is a high
deductible health plan for use in connection with an existing health savings
account, in compliance with the Internal Revenue Code, section 223.In that situation, the same or a different
health carrier may offer, issue, sell, or renew a group health plan to cover
the other eligible employees in the group.

(k)
A health carrier may offer, sell, issue, or renew an individual health plan to
one or more employees of a small employer if the individual health plan is
marketed directly to all employees of the small employer and the small employer
does not contribute directly or indirectly to the premiums or facilitate the
administration of the individual health plan.The requirement to market an individual health plan to all employees does
not require the health carrier to offer or issue an individual health plan to
any employee.For purposes of this
paragraph, an employer is not

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8092

contributing to
the premiums or facilitating the administration of the individual health plan
if the employer does not contribute to the premium and merely collects the
premiums from an employee's wages or salary through payroll deductions and
submits payment for the premiums of one or more employees in a lump sum to the health
carrier.Except for coverage under
section 62A.65, subdivision 5, paragraph (b), or 62E.16, at the request of an
employee, the health carrier may bill the employer for the premiums payable by
the employee, provided that the employer is not liable for payment except from
payroll deductions for that purpose.If
an employer is submitting payments under this paragraph, the health carrier
shall provide a cancellation notice directly to the primary insured at least
ten days prior to termination of coverage for nonpayment of premium.Individual coverage under this paragraph may
be offered only if the small employer has not provided coverage under section
62L.03 to the employees within the past 12 months.

The
employer must provide a written and signed statement to the health carrier that
the employer is not contributing directly or indirectly to the employee's
premiums.The health carrier may rely
on the employer's statement and is not required to guarantee-issue individual
health plans to the employer's other current or future employees.

EFFECTIVE DATE.This section is effective the day following final enactment.

Subd.
7.Educational
programs and services.(a) The
board of directors of each SC shall submit annually a plan to the members.The plan shall identify the programs and
services which are suggested for implementation by the SC during the following
year and shall contain components of long-range planning determined by the
SC.These programs and services may
include, but are not limited to, the following areas:

An
SC is subject to regulation and oversight by the commissioner of commerce under
the insurance laws of this state when operating a health reinsurance program
pursuant to clause (19) providing reinsurance or stop loss coverage.

(b)
A group health, dental, or long-term disability coverage program provided by
one or more service cooperatives may provide coverage to nursing homes licensed
under chapter 144A and to boarding care homes licensed under sections 144.50 to
144.56 and certified for participation in the medical assistance program
located in this state.

EFFECTIVE DATE.This section is effective the day following final enactment.

Subd.
12.Health
coverage pool comparison shopping.(a) Service cooperative must permit school districts and other
political subdivisions participating in a service cooperative health coverage
pool to solicit bids and other information from competing sources of health
coverage at any time other than within five months prior to the end of a master
agreement.

(b)
A service cooperative must not impose a fine or other penalty against an
enrolled entity for soliciting a bid or other information during the allowed
period.The service cooperative may
prohibit the entity from participating in service cooperative coverage for a
period of up to one year, if the entity leaves the service cooperative pool and
obtains other health coverage.

(c)
A service cooperative must provide each enrolled entity with the entity's
monthly claims data.This paragraph
applies notwithstanding section 13.203.

Journal of the House - 111th
Day - Saturday, May 20, 2006 - Top of Page 8094

The commissioner shall
report to the legislature by December 15, 2006, on the redesign of case
management services.In preparing the
report, the commissioner shall consult with representatives for consumers,
consumer advocates, counties, labor organizations representing county social
service workers, and service providers.The report shall include draft legislation for case management changes
that will:

(1) streamline
administration;

(2) improve consumer access
to case management services;

(3) address the use of a
comprehensive universal assessment protocol for persons seeking community
supports;

(4) establish case
management performance measures;

(5) provide for consumer
choice of the case management service vendor; and

(6) provide a method of
payment for case management services that is cost-effective and best supports
the draftlegislation in clauses (1) to
(5)."

Subd. 3a.Disability
and income loss benefits election; senior citizens.A plan of reparation security issued to or
renewed with a person who has attained the age of 65 60 years,
or who is retired and receiving a pension, must provide disability and
income loss benefits under section 65B.44, subdivision 3, unless the insured
elects not to have this coverage.An
election by the insured not to have this coverage remains in effect until
revoked by the insured.The reparation
obligor shall notify a person of the person's rights under this section at the
time of the sale or the first renewal of the policy after the insured has
attained the age of 65 60 years, or after the insurer has been
notified that the insured is retired and receiving a pension, and at least
annually after that.The rate for any
plan for which coverage has been excluded or reduced pursuant to this section
must be reduced accordingly.This
section does apply to self-insurance.

EFFECTIVE DATE.This section is effective August 1, 2006, and applies to plans
of reparation security issued or renewed on or after that date."

The motion prevailed and the amendment was adopted.

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8095

Subd.
3.Deductibles.(a) A health maintenance contract
issued by a health maintenance organization that is assessed less than three
percent of the total annual amount assessed by the Minnesota comprehensive
health association may impose deductibles not to exceed $3,000
$4,000 per person, per year and $6,000 $8,000 per family, per
year.For purposes of the percentage
calculation, a health maintenance organization's assessments include those of
its affiliates.

(b)
All other health maintenance contracts may impose deductibles not to exceed
$2,250 per person, per year and $4,500 per family, per year.

Subd.
4.Annual
out-of-pocket maximums.(a)
A health maintenance contract issued by a health maintenance organization that
is assessed less than three percent of the total annual amount assessed by the
Minnesota comprehensive health association must include a limitation not to
exceed $4,500 $5,000 per person and $7,500 $10,000
per family on total annual out-of-pocket enrollee cost-sharing expenses.For purposes of the percentage
calculation, a health maintenance organization's assessments include those of
its affiliates.

(b)
All other health maintenance contracts must include a limitation not to exceed
$3,000 per person and $6,000 per family on total annual out-of-pocket enrollee
cost-sharing expenses."

Page
36, after line 4, insert:

"Sec.
25.[62J.83] REDUCED PAYMENT AMOUNTS PERMITTED.

(a)
Notwithstanding any provision of chapter 148 or any other provision of law to
the contrary, a health care provider may provide care to a patient at a
discounted payment amount, including care provided for free.

(b)
This section does not apply in a situation in which the discounted payment
amount is not permitted under federal law.

EFFECTIVE DATE.This section is effective the day following final enactment."

Journal of the House - 111th
Day - Saturday, May 20, 2006 - Top of Page 8096

If no independently
developed evidence-based standards exist for a particular treatment, testing,
or imaging procedure, then an insurer or utilization review organization shall
not deny coverage of the treatment, testing, or imaging based solely on the
grounds that the treatment, testing, or imaging does not meet an evidence-based
standard.This section does not
prohibit an insurer or utilization review organization from denying coverage
for services that are investigational, experimental, or not medically
necessary.

(a) The commissioner may use
reports submitted by health plan companies, service cooperatives, and the
public employee insurance program created in section 43A.316 to compile entity
specific administrative efficiency reports; may make these reports available on
state agency Web sites, including minnesotahealthinfo.com; and may include
information on:

(1) number of covered
lives;

(2) covered services;

(3) geographic
availability;

(4) whom to contact to
obtain current premium rates;

(5) administrative costs,
using the definition of administrative costs developed under section
62J.38;

(6) Internet links to
information on the health plan, if available; and

(7) any other information
about the health plan identified by the commissioner as being useful for
employers, consumers, providers, and others in evaluating health plan options.

(b) This section does not
apply to a health plan company unless its annual Minnesota premiums exceed
$50,000,000 based on the most recent assessment base of the Minnesota
Comprehensive Health Association.For
purposes of this determination, the premiums of a health plan company include
those of its affiliates."

Subd. 7.Educational
programs and services.(a) The
board of directors of each SC shall submit annually a plan to the members.The plan shall identify the programs and
services which are suggested for implementation by the SC during the following
year and shall contain components of long-range planning determined by the
SC.These programs and services may
include, but are not limited to, the following areas:

Journal of the House - 111th
Day - Saturday, May 20, 2006 - Top of Page 8097

(12) teaching and learning
services, including services for students with special talents and special
needs;

(13) employee personnel
services;

(14) vocational
rehabilitation;

(15) health, diagnostic, and
child development services and centers;

(16) leadership or direction
in early childhood and family education;

(17) community services;

(18) shared time programs;

(19) fiscal services and
risk management programs;

(20) technology planning,
training, and support services;

(21) health and safety
services;

(22) student academic
challenges; and

(23) cooperative purchasing
services.

(b) A group health, dental,
or long-term disability coverage program provided by one or more service
cooperatives:

(1) must rebid contracts for
insurance and third-party administration at least every four years.The contracts may be regional or statewide
in the discretion of the SC; and

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8098

(2) may
determine premiums for its health, dental, or long-term disability coverage
individually for specific employers or may determine them on a pooled or other
basis established by the SC.

EFFECTIVE DATE.This section is effective the day following final enactment."

Page
80, after line 8, insert:

"Sec.
72.MEDICAL MALPRACTICE INSURANCE REPORT.

(a)
The commissioner of commerce shall provide to the legislature annually a brief
written report on the status of the market for medical malpractice insurance in
Minnesota.The report must summarize,
interpret, explain, and analyze information on that subject available to the
commissioner, through annual statements filed by insurance companies,
information obtained under paragraph (c), and other sources.

(b)
The annual report must consider, to the extent possible, using definitions
developed by the commissioner, Minnesota-specific data on market shares;
premiums received; amounts paid to settle claims that were not litigated,
claims that were settled after litigation began, and claims that were litigated
to court judgment; amounts spent on processing, investigation, litigation, and
otherwise handling claims; other sales and administrative costs; and the loss
ratios of the insurers.

(c)
Each insurance company that provides medical malpractice insurance in this
state shall, no later than June 1 each year, file with the commissioner of
commerce, on a form prescribed by the commissioner and using definitions
developed by the commissioner, the Minnesota-specific data referenced in
paragraph (b), other than market share, for the previous calendar year for that
insurance company, shown separately for various categories of coverages including,
if possible, hospitals, medical clinics, nursing homes, physicians who provide
emergency medical care, obstetrician gynecologists, and ambulance
services.An insurance company need not
comply with this paragraph if its direct premium written in the state for the
previous calendar year is less than $2,000,000."

The bill was read for the third time and placed upon its final
passage.

The question was taken on the passage of the bill and the roll
was called.There were 122 yeas and 11
nays as follows:

Those who voted in the affirmative were:

Abeler

Abrams

Anderson, B.

Atkins

Beard

Bernardy

Blaine

Bradley

Brod

Carlson

Charron

Clark

Cornish

Cox

Cybart

Davnie

DeLaForest

Demmer

Dempsey

Dill

Dittrich

Dorman

Dorn

Eastlund

Eken

Ellison

Entenza

Erhardt

Erickson

Finstad

Fritz

Garofalo

Gazelka

Goodwin

Greiling

Gunther

Hamilton

Hansen

Hausman

Haws

Heidgerken

Hilstrom

Hilty

Hoppe

Hornstein

Hortman

Hosch

Howes

Huntley

Jaros

Johnson, J.

Johnson, R.

Johnson, S.

Juhnke

Kahn

Kelliher

Klinzing

Knoblach

Koenen

Kohls

Lanning

Larson

Latz

Lenczewski

Lesch

Liebling

Lieder

Lillie

Loeffler

Magnus

Mahoney

Mariani

Marquart

McNamara

Meslow

Moe

Mullery

Murphy

Nelson, M.

Nelson, P.

Newman

Nornes

Otremba

Ozment

Paulsen

Paymar

Pelowski

Penas

Peppin

Peterson, A.

Peterson, N.

Peterson, S.

Poppe

Rukavina

Ruth

Ruud

Sailer

Samuelson

Scalze

Seifert

Sertich

Severson

Sieben

Simon

Simpson

Slawik

Smith

Soderstrom

Solberg

Sykora

Thao

Thissen

Tingelstad

Urdahl

Wagenius

Walker

Wardlow

Welti

Westerberg

Westrom

Wilkin

Spk. Sviggum

Those who voted in the negative were:

Buesgens

Davids

Dean

Emmer

Hackbarth

Holberg

Krinkie

Olson

Powell

Vandeveer

Zellers

The bill was passed and its title agreed to.

Journal of the House - 111th
Day - Saturday, May 20, 2006 - Top of Page 8101

The Speaker resumed the Chair.

S. F. No. 2939 was reported to the House.

Cornish and Juhnke moved to
amend S. F. No. 2939, the unofficial engrossment, as follows:

Page 2, after line 24,
insert:

"Sec. 4.CITY
OF KIESTER; OPERATION OF A GROCERY STORE.

The city of Kiester may
acquire inventory for and operate a grocery store in the city on property owned
by the city.The city may issue capital
notes of the city in the aggregate principal amount not to exceed $150,000 to
finance acquisition of inventory and operation of the store.The capital notes must be issued under
Minnesota Statutes, section 412.301, for the purposes permitted in this
section.The debt represented by the
notes is not included in computing any debt limitations applicable to the city.

EFFECTIVE DATE.Under Minnesota Statutes 2004, section 645.023, subdivision
1a, this section is effective without local approval on the day following final
enactment."

Renumber the sections in
sequence and correct the internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

S. F. No. 2939, A bill for an act relating to the city of
Pennock; authorizing the city to acquire a certain parcel of real estate and
appurtenant building and to expend city funds to improve the building;
authorizing the city to convey the parcel to a private entity to be operated as
a commercial establishment; authorizing the city to issue bonds.

The bill was read for the third time, as amended, and placed
upon its final passage.

The question was taken on the passage of the bill and the roll
was called.There were 103 yeas and 30
nays as follows:

Those who
voted in the affirmative were:

Abeler

Atkins

Beard

Bernardy

Blaine

Bradley

Brod

Carlson

Clark

Cornish

Cox

Davids

Davnie

Dean

Demmer

Dempsey

Dill

Dittrich

Dorman

Dorn

Eken

Ellison

Entenza

Erhardt

Finstad

Fritz

Gazelka

Gunther

Hackbarth

Hamilton

Hansen

Hausman

Haws

Heidgerken

Hilstrom

Hilty

Hornstein

Hortman

Hosch

Howes

Huntley

Jaros

Johnson, R.

Johnson, S.

Juhnke

Kahn

Kelliher

Knoblach

Koenen

Lanning

Latz

Lesch

Liebling

Lieder

Lillie

Magnus

Mahoney

Mariani

Marquart

McNamara

Meslow

Moe

Mullery

Murphy

Nelson, M.

Newman

Nornes

Olson

Otremba

Ozment

Paymar

Penas

Journal
of the House - 111th Day - Saturday, May 20, 2006 - Top of Page 8102

Peterson, A.

Peterson, N.

Peterson, S.

Poppe

Powell

Rukavina

Ruth

Sailer

Samuelson

Scalze

Seifert

Sertich

Severson

Sieben

Simon

Simpson

Slawik

Smith

Soderstrom

Solberg

Sykora

Thao

Thissen

Tingelstad

Urdahl

Wagenius

Walker

Wardlow

Welti

Westrom

Spk. Sviggum

Those who voted in the negative were:

Abrams

Anderson, B.

Buesgens

Charron

Cybart

DeLaForest

Eastlund

Emmer

Erickson

Garofalo

Goodwin

Greiling

Holberg

Hoppe

Johnson, J.

Klinzing

Kohls

Krinkie

Larson

Lenczewski

Loeffler

Nelson, P.

Paulsen

Pelowski

Peppin

Ruud

Vandeveer

Westerberg

Wilkin

Zellers

The bill was passed, as amended, and its title agreed to.

S. F. No. 2723, A bill for an act relating to the environment;
requiring a report by the Pollution Control Agency on new public wastewater
treatment facilities that do not meet water quality discharge standards;
requiring proposals for new wastewater treatment facilities to include
information on operating and maintenance costs during the first five years of
operation; amending Minnesota Statutes 2004, section 115.447; proposing coding
for new law in Minnesota Statutes, chapter 115.